Grissom Products installs standard and deluxe storage sheds. Most of the installation process of the sheds is done using direct labor. There are a maximum of 24,000 direct labor hours available each year.
Selected data related to each product is as follows:
Standard
Deluxe
Sales price per unit
$2,000
$4,000
Direct materials per unit
350
600
Direct labor per unit
250
350
Variable overhead per unit
100
200
Direct labor hours per unit
4
6
The company believes that there is sufficient demand for the sale and installation of up to 4,000 standard and 2,500 deluxe sheds each year.
Question: How many of each type should be installed in order for the company to maximize profits?
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