Illustrate what is mad hatter most profitable sales mix

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Reference no: EM13124776

The Mad Hatter Company owns a machine which manufactures two types of chimney caps. Production time is .20 hours for cap A and .40 hours for cap B. The machine's capacity is 2,000 hours per year. Both products are sold to a single customer who has agreed to buy all of the company's output up to a maximum of 1,000 units of cap A and 6,000 units of cap B. Selling prices and variable costs per unit are shown below. Based on this information, what is the Mad Hatter's most profitable sales mix?

Cap A Cap B
Selling Price per Unit $80 $60
Variable Cost per Unit 53 43

Reference no: EM13124776

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