Question

oylan Company manufactures two productslong dashtoaster ovens and bread machines. The following data are​ available: Toaster Ovens Bread Machines Sales price $ 70 $ 170 Variable costs $ 30 $ 60 Boylan can manufacture six toaster ovens per machine hour and four bread machines per machine hour.​ Boylan's production capacity is 1 comma 600 machine hours per month. Marketing limitations indicate that Boylan can sell a maximum of 5 comma 100 toasters and 4 comma 000 bread machines per month. Which product and how many units should the company produce in a month to maximize​ profits? (Round machine hour per unit to two decimal places and your final answer to the nearest whole​ dollar.) A. 3 comma 600 toaster ovens and 4 comma 000 bread machines B. 9 comma 600 toaster ovens C. 5 comma 100 toaster ovens and 3 comma 000 bread machines D. 6 comma 400 bread machines

Answer 1

	Toaster Ovens	Bread Machines
Sales price	70	170
Less: Variable costs	30	60
Contribution margin per unit	40	110
X Units per machine hour	6	4
Contribution margin per machine hour	240	440
The company should produce Bread Machines first and then Toaster Ovens
Units of Bread Machines	4000
Hours to produce Bread Machines	1000	=4000/4
Hours to produce Toaster Ovens	600
Units of Toaster Ovens	3600	=600*6
Option A 3,600 toaster ovens and 4,000 bread machines is correct