Smash Company has 4000 machine hours available annually to manufacture badminton racquets.The following information is available for the two different racquets produced by Smash: $\begin{array}{|r|r|}
\hline \text { Pro } & \
\hline \text { Unit sales price } & \$ 300 \
\hline \text { Unit variable costs } & \$ 150 \
\hline \text { Annual demand } & 1800 \text { units } \
\hline \text { Machine time } & 1.25 \text { hours per unit } \
\hline Mid\
\hline \text { Unit sales price } & \$ 100 \
\hline \text { Unit variable costs } & \$ 70 \
\hline \text { Annual demand } & 5000 \text { units } \
\hline \text { Machine time } & \text { 6 hours per unit }\
\hline
\end{array}$ How many units of each racquet should be manufactured for the company to maximize its operating income? (Round your answer to the nearest whole unit.)

Question

Quizplus · Accepted Answer

To maximize operating income, prioritize the product with the highest contribution margin per machine hour. Pro racquets have a contribution margin of $120 per hour, while Mid racquets have $5 per hour. Produce 1800 Pro racquets (2250 hours) and use the remaining 1750 hours for 292 Mid racquets.

Smash Company Has 4000 Machine Hours Available Annually to Manufacture