Calculate the optimal number of units of each model

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Reference no: EM13948640

O'Connor Company produces two models of machine housings that require the use of a special lathe. The six lathes owned by the firm provide a total of 12,000 hours per year. Model 14-D requires four hours of machine time, and Model 33-P requires two hours of machine time. Model 14-D has a contribution margin of $12 per unit, and Model 33-P has a contribution margin of $10.

Required

1. Calculate the optimal number of units of each model that should be produced, assuming that an unlimited number of each model can be sold.

2. Calculate the optimal number of units of each model that should be produced, assuming that no more than 5,000 units of each model can be sold.

Reference no: EM13948640

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