Consider Boxes Unlimited in S8-8. Assume that demand for Regular bins is limited to 30,000 units and demand for large bins is limited to 25,000 units.
In Exercise 8
Sales price per unit. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $8.50......$10.60
Variable cost per unit . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $3.50......$ 4.60
1. How many of each size bin should the company make now?
2. Given this product mix, what will be the company's operating income?
3. Explain why the operating income is less than it was when the company was producing its optimal product mix.