How many of each model should Delfi produce to maximize profit in May?
Delfi Company produces two models of seats, Toro and Prep. Information regarding these products for May follows:
|
Toro |
Prep |
|
|
Number of units |
3,000 |
7,000 |
|
Sales revenue |
$120,000 |
$140,000 |
|
Variable costs |
60,000 |
42,000 |
|
Fixed costs |
24,000 |
50,000 |
|
Net Income |
$36,000 |
$48,000 |
|
Pounds of plastic to produce one bucket |
4.0 |
1.6 |
|
Contribution margin per unit |
$20 |
$14 |
Due to increased demand of plastic in the market, Delfi Company can obtain only 9,000 pounds of plastic per month. Delfi can sell as many seats as it can produce of either model. How many of each model should Delfi produce to maximize profit in May considering the constraint?
Question 17 options:
|
Toro: 0; Prep: 4,375 |
|
Toro: 2,250; Prep: 0 |
|
Toro: 1,125; Prep: 2,812 toro; 0; prep: 5,625 |
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