Joyner Products Joyner Products makes cedar garden benches in three sizes: small, medium, and large. Joyner sells the benches to local retailers. The benches can be sold with or without assembly. The following information is available for each table:
Refer to the Joyner Products information above. What is the maximum amount of increase in net income from further processing?

Question

Joyner Products Joyner Products makes cedar garden benches in three sizes: small, medium, and large. Joyner sells the benches to local retailers. The benches can be sold with or without assembly. The following information is available for each table:
 Refer to the Joyner Products information above. What is the maximum amount of increase in net income from further processing?

Quizplus · Accepted Answer

By further processing the benches by assembling them, the company can increase its revenue by $10 per small bench, $15 per medium bench, and $20 per large bench. The maximum amount of increase in net income would come from assembling and selling the largest number of the largest benches.

The maximum increase per large bench is $20, and the company can produce 500 large benches, so the maximum increase in net income would be 500 x $20 = $10,000.

Therefore, the best choice is to further process and sell the large benches, which would result in a maximum increase of $6,625 (after subtracting the additional labor and materials costs).

Joyner Products Joyner Products Makes Cedar Garden Benches in Three