Formal $4,200,000 = $15 × 8 hours × 35,000 units
d
Variable overhead:
Basic $80,000 = $4 × 0.8 hours × 25,000 units
Classic $120,000 = $4 × 2 hours × 15,000 units
Formal $1,120,000 = $4 × 8 hours × 35,000 units
e
Variable marketing:
Basic $75,000 = 10% × $750,000 revenue
Classic $90,000 = 10% × $900,000 revenue
Formal $665,000 = 10% × $6,650,000 revenue
f
Total contribution margin: $620,500 = $105,000 + $183,000 + $332,500
g
Total fixed costs: $86,500 = $41,000 + $10,500 + $35,000
b-1.
Compute the contribution margin for each shirt per the constrained resource, direct labor.
(Do
not round intermediate calculations. Round your final answers to 3 decimal places.)

b-2.
Which of the three product lines makes the most profitable use of the constrained resource,
direct labor?

c.
Given the information in the problem so far, what product mix do you recommend?

d-1
. Calculate the contribution margin for each type of dress shirt using the table below.

d-2.
How much operating profit should your recommended product mix generate?
(Round down
"Units produced in Basics" to the nearest whole number.)

d
Variable overhead:

e.
Suppose that the company could expand its labor capacity by running an extra shift that could
provide up to 12,500 more hours. The direct labor cost would increase from $15 to $18 per hour for
all hours of direct labor used during the additional shift. What additional product(s) should Austin
manufacture and what additional profit would be expected with the use of the added shift?
(Round
down "Units produced" to nearest whole number and final answer to 2 decimal places.)
e.