| Answer | |||||
| 1) | Constrain refers to the limited resources. For Lifemaster, contrain is Machine Hours. |
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| 2) | Deluxe | Regular | |||
| Sale Price | 1020 | 560 | |||
| Less: Variable Cost | 763 | 431 | |||
| Contribution Margin | 257 | 129 | |||
| Machine Hours | 3 | 1 | |||
| Contribution per machine hours | 86 | 129 | |||
| Thus Life master should produce Regular model only. |
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| 3) | Product Mix will be | Contribution | |||
| Deluxe | 1 unit | 257 | |||
| Regular | 3 unit | 387 | |||
| 644 | |||||
