Solution-How many units of each model should pappy produce

How many units of each model should pappy produce

Reference no: EM132634344

Pappy's Toys makes two models of a metal toy-Standard and DeLuxe. Both models are produced on a single machine. The price and costs of the two models appear as follows.

Standard DeLuxe

Price per unit $135 $155

Variable cost per unit $58 $62

Machine hours per unit 0.5 1.5

The one machine that used to produce both models has a capacity of 109,000 machine-hours per quarter. Fixed manufacturing costs per quarter are $895,000.

Required:

Question a. Suppose that the maximum unit sales in a quarter that Pappy's can achieve is 238,000 units of each product. How many units of each model should Pappy's produce in a quarter?

Question b. Suppose that the maximum unit sales in a quarter that Pappy's can achieve is 129,500 units of each product. How many units of each model should Pappy's produce in a quarter?

Reference no: EM132634344

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How many units of each model should pappy produce

Reference no: EM132634344

Reference no: EM132634344

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