Little Toy Company Makes and Sells Miniature Doll Houses A)8,000 Standard; 3,000 Deluxe

Multiple Choice

Little Toy Company makes and sells miniature doll houses.Little produces two kinds of houses: Standard and Deluxe.The demand for doll houses is highest in November and December.Expecting this trend to continue Little is interested in how to best utilize available capacity.Given the following information, what combination of doll houses should Little produce? $$\begin{array} { l r r } & \text { Standard } & \text { Deluxe } \\\text { Demand } & 8,000 & 3,000 \\\text { Unit Price } & \$ 60 & \$ 80 \\\text { Unit variable cost } & \$ 25 & \$ 35 \\\text { Unit contribution margin } & \$ 35 & \$ 45 \\\text { Production rate (units per hour) } & 2 & 1 \\\text { Available production hours } & & 5,000 \text { hrs } \\\text { Total fixed costs } & & \$ 40,000\end{array}$$

A) 8,000 Standard; 3,000 Deluxe.
B) 8,000 Standard; 1,000 Deluxe.
C) 5,000 Standard; 3,000 Deluxe.
D) 3,636 Standard; 7,364 Deluxe.
E) 3,636 Standard; 1,363 Deluxe.