Question

1. ) Makers Mark Company manufactures two products, toaster ovens and bread machines. The following data are available:

	Toaster Ovens	Bread Machines
Sale price	$80	$150
Variable costs	$40	$100

Makers Mark can manufacture six toaster ovens per machine hour and four bread machines per machine hour. Makers Mark Living's production capacity is 1,800 machine hours per month. Marketing limitations indicate that Makers Mark can sell a maximum of 5,000 toasters a month, and 4,000 bread machines per month. Which product and how many units should the company produce in a month to maximize profits?

Answer 1

Solution

Statement of Optimum mix
Product	Units to be Produced
Toaster Ovens	5,200
Bread Machines	3,867 or 3866

If answer do not match then leave a comment with roundoff information so that i can provide an exact answer

Working

Statement of Optimum mix
Product	Units to be Produced	Machine hours per unit	Machine hours consumed
Toaster Ovens	5,000	0.17	833.33
Bread Machines	3,867	0.25	966.67

.

Statement of ranking indicating which product to produced first and second
	Product
	Toaster Ovens	Bread Machines
Sales price per unit	$    80.00	$ 150.00
Variable cost per unit	$    40.00	$ 100.00
Contribution margin per unit	$    40.00	$    50.00
Machine hours per unit	0.17	0.25
Contribution margin per machine hour	$ 240.00	$ 200.00
Ranking	First	Second