Elegance Bath Products, Inc. (EBP) makes a variety of ceramic sinks and tubs. EBP has just developed a line of sinks and tubs made from a mixture of glass and ceramic. The sinks sell for $150 each and have variable costs of $80. The tubs sell for $600 and have variable cost of $450. The glass and ceramic sinks and tubs require the use of specialized moulding equipment. The specialized moulding equipment has 4,050 hours of capacity per year. A sink uses an average of two hours of specialized moulding equipment time; a tub uses an average of five hours of specialized moulding equipment time.
-Refer to the Figure.Assume that EBP can sell as many as 1,000 sinks and 500 tubs per year.How many tubs should EBP produce?
A)0
B)410
C)500
D)675

Question

Quizplus · Accepted Answer

EBP should produce 410 tubs to maximize profit, given the constraint of 4,050 hours of specialized moulding equipment time.