EduToys can sell a maximum of 10,000 Mr. Spells and 25,000 Etch-a-Sketches. Mr. Spell has a...
EduToys can sell a maximum of 10,000 Mr. Spells and 25,000 Etch-a-Sketches. Mr. Spell has a contribution margin of $4.20 per unit and requires 3 machine hours to produce. Etch-a-Sketch has a contribution margin of $6.60 per unit and requires 6 machine hours to produce. EduToys currently as 54,000 machine hours available. How many Mr. Spells and Etch-a-Sketches should EduToys produce to maximize profits for the company?
Homework Answers
Contribution margin per hour
| Mr Spells | Etch a Sketches | |
| Contribution margin per unit | 4.20 | 6.60 |
| Machine hour per unit | 3 | 6 |
| Contribution margin per hour | 1.40 | 1.1 |
Optimum mix
| Optimum mix | |
| Mr spells | 10000 |
| Etch sketches | (54000-30000/6) = 4000 |
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