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Portable Enterprises produces two lines of mobile homes:double-wide and single-wide. Unit cost and revenue data pertainingto each product are shown below:

Double-wide Single-wide
Sellingprice $70,000 $40,000
Total variablecost 45,000 20,000

Each double-wide home requires 350 different labor hours and 125machine hours. Each single-wide home requires 175 direct laborhours and 150 machine hours. Demand for each line of homes farexceeds the company's total production capacity.

(a) If Portable%u2019s production capacity is constrained bylimited direct labor hours, which line of homes should it produce?

(b) If Portable%u2019s total production capacity is constrained bymachine hours, which line of homes should it produce?

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M9959045

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