15-20 - 15-20 15-31(continued Notice that at this optimal...

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15-20 15-31 (continued) Notice that at this optimal production mix of 3,200 Jigs and 800 Boppers, excess demand for 200 Boppers remains. The company could sell more Boppers, but it prefers not to because producing more Boppers to sell would be possible only if fewer Jigs are produced for sale. Thus, there would be no reason for the company to increase this excess demand by an additional 200 units. That is, the maximum total contribution margin which could be earned would not increase because the best production mix is still 3,200 Jigs and 800 Boppers. On the other hand, if demand for Jigs increased by 200 units (to 3,400 units), the company would change its plan as follows: First, produce 3,400 Jigs, use 850 hours and earn $102,000 Next, produce 700 Boppers, use 350 hours and earn 31,500 Now, the best use of the total 1,200 hours earns $133,500 contribution margin for the company. This plan increases the total contribution margin for the company by
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