Boylan Company manufactures two products—toaster ovens and bread machines

Question

The following data are available:

Toaster Ovens Bread Machines
Sales price $60 $150
Variable costs $30 $50

Boylan can manufacture six toaster ovens per machine hour and four bread machines per machine hour. Boylan's production capacity is 1,800 machine hours per month. Marketing limitations indicate that Boylan can sell a maximum of 5,100 toasters and 4,100 bread machines per month. Which product and how many units should the company produce in a month to maximize profits? (Round machine hour per unit to two decimal places and your final answer to the nearest whole dollar.)
A) 7,200 bread machines
B) 4,650 toaster ovens and 4,100 bread machines
C) 5,400 toaster ovens and 3,600 bread machines
D) 10,800 toaster ovens

Answer 1

B .B)
Toaster Bread
Sales price $60 $150
Variable costs 30 50
Contribution margin $30 $100
Number of units per hour 6 4
Contribution margin per machine hour $180.00 $400.00
Ranking 2 1

No. of units Hours available
Total 1,800
Bread machines (4,100/4 ) 4,100 1,025
Toast ovens (775 x 6 ) 4,650 775