Boylan Company manufactures two products-toaster ovens and bread machines.The following data are available: $$\begin{array} { | l | r | r | }
\hline & \text { Toaster Ovens } & \text { Bread Machines } \
\hline \text { Sales price } & \$ 60 & \$ 150 \
\hline \text { Variable costs } & \$ 30 & \$ 50 \
\hline
\end{array}$$ Boylan can manufacture six toaster ovens per machine hour and four bread machines per machine hour.Boylan's production capacity is 1,800 machine hours per month.Marketing limitations indicate that Boylan can sell a maximum of 5,100 toasters and 4,100 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. )

Question

Boylan Company manufactures two products-toaster ovens and bread machines.The following data are available: $$\begin{array} { | l | r | r | } 
\hline & \text { Toaster Ovens } & \text { Bread Machines } \
\hline \text { Sales price } & \$ 60 & \$ 150 \
\hline \text { Variable costs } & \$ 30 & \$ 50 \
\hline
\end{array}$$ Boylan can manufacture six toaster ovens per machine hour and four bread machines per machine hour.Boylan's production capacity is 1,800 machine hours per month.Marketing limitations indicate that Boylan can sell a maximum of 5,100 toasters and 4,100 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. )

Quizplus · Accepted Answer

Boylan can produce 6 toaster ovens or 4 bread machines per machine hour. To maximize profits, Boylan should produce the product that contributes the most per machine hour. The contribution per machine hour for each product is:Toaster ovens: $60 - $30 = $30 per machine hourBread machines: $150 - $50 = $100 per machine hourTherefore, Boylan should produce bread machines.Boylan can produce a maximum of 1,800 machine hours per month. Therefore, Boylan can produce a maximum of 1,800 * 4 = 7,200 bread machines per month.However, Boylan can only sell a maximum of 4,100 bread machines per month. Therefore, Boylan should produce 4,100 bread machines per month.To determine how many toaster ovens Boylan should produce, we need to subtract the number of machine hours used to produce bread machines from the total number of machine hours available.Machine hours used to produce bread machines: 4,100 bread machines * (1 machine hour / 4 bread machines) = 1,025 machine hoursMachine hours available for toaster ovens: 1,800 machine hours - 1,025 machine hours = 775 machine hoursBoylan can produce 775 machine hours * 6 toaster ovens / machine hour = 4,650 toaster ovens per month.Therefore, Boylan should produce 4,650 toaster ovens and 4,100 bread machines per month to maximize profits.

Boylan Company Manufactures Two Products-Toaster Ovens and Bread Machines Boylan Can Manufacture Six Toaster Ovens Per Machine Hour and Data