Sadie Kitchenware Co. manufactures two products: toaster ovens and bread machine
ID: 2456615 • Letter: S
Question
Sadie Kitchenware Co. manufactures two products: toaster ovens and bread machines. The following data are available:
Toaster Ovens
Bread Machines
Sale price
$80
$150
Variable costs
$40
$70
Sadie Kitchenware Co. can manufacture six toaster ovens per machine hour and four bread machines per machine hour. Sadie Kitchenware Co.’s production capacity is 1,800 machine hours per month, and Sadie Kitchenware Co. can sell as many units of either type as it can produce. What product and how many units should the company produce in a month to maximize profits?
A) 7,200 bread machines
B) 5,400 toaster ovens and 3,600 bread machines
C) 7,200 toaster ovens and 2,400 bread machines
D) 10,800 toaster ovens
Toaster Ovens
Bread Machines
Sale price
$80
$150
Variable costs
$40
$70
Explanation / Answer
As per Ranking
We should produce Bread Machines as first upto the demand , since the demand is unlimited , so we should produce only Bread Machines
No of Bread Machines to be produced for maximize profits = 1800*4
No of Bread Machines to be produced for maximize profits = 7200
Answer
A) 7,200 bread machines
Toaster Ovens Bread Machines Sale price 80 150 Variable costs 40 70 Contribution Margin per unit 40 80 No of Unit per machine hour 6 4 Contribution Margin per Machine Hour 240 320 Rank II IRelated Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.