Wendy’s Wind Toys manufactures decorative kites, banners, and windsocks. During

Question

Wendy’s Wind Toys manufactures decorative kites, banners, and windsocks. During the month of January, Wendy received orders for 5,000 Valentine’s Day banners and 1,300 Easter kites. Because several sewing machines are in the shop for repairs, Wendy’s has only 1,200 sewing machine hours available for production of these orders. Each Valentine’s Day banner sells for $11. The banners take one hour to sew and have a total variable cost of $9 per banner. The Easter kites sell for $15. They take 15 minutes to sew and have a total variable cost of $14. (1) With only 1,200 sewing machine hours available, how many units will Wendy be able to produce for the below items? Kites Banners (2) Based on your calculations in (1), what products should Wendy schedule for production in January?

Explanation / Answer

Kites require = 15/60 = .25 hours per unit

Therefore total it can manufacture = 1200 * .25 = 300 kites

(2)

Since Wndy's should schedule kites for Janaury since its contribution per machine hours is more

Banner kite selling price $11 $15 Less: variable cost $9 $14 Contributon per unit $2 $1 hours per unit 1 hr .25 hr contribution per machine hr $2 $4

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