Lie Around Furniture manufactures two products: Couches and Beds. The following data are available: Couches Beds Sales price Variable costs The company can manufacture either couches per machine hour or bed(s) per machine hour. The company's production capacity is machine hours per month. To maximize profits, what product and how many units should the company produce in a month?

the company should produce 5,200 / 0.5 = 10,400 beds, resulting in a gross profit of $3,692,000

Explanation:

The numbers are missing, so i looked them up:

                             sales price          variable costs       machine hours

Couches                    $550                    $350                    0.333

Beds                          $750                    $395                     0.5

total machine hours = 5,200

the constraint here is machine hours, so we must determine the contribution margin per machine hour:

since the contribution margin per machine hour is higher for beds, then the company should produce 5,200 / 0.5 = 10,400 beds, resulting in a gross profit of $3,692,000

answer; commerce clearing house;