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 24000 direct labor hours available each year.
Selected data related to each product is as follows:
Standard
Deluxe
Sales price per unit
$2000
$4000
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 4000 standard and 2500 deluxe sheds each
year.
Question: How many of each type should be installed in
order for the company to maximize profits?