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2. (6 points) Flamethrower George (FG) makes fireworks. Summer is the busy time of the year and it is almost here, and FG only has
2. (6 points) Flamethrower George (FG) makes fireworks. Summer is the busy time of the year and it is almost here, and FG only has 50 pounds of gunpowder remaining (and no more is available to buy with quick delivery). FG manufactures two types of one that launch into the air flamethrowers: Flyers (for large venues) and stationary ones (for home use). With the limited gun powder remaining, management wants to produce the flamethrowers that will maximize profits. The following information shows the per-unit information regarding the production and sale of these flamethrowers: Pounds of powder Direct materials Direct labor Variable overhead Fixed overhead Selling price Flyers 2 lbs. $5.00 $6.00 $1.00 $2.00 $50.00 Stationary 0.75 lbs. $1.25 $3.00 $0.50 $1.00 $20.00 With the strong demand for flamethrowers, assume that selling costs are negligible as either type of flamethrower could be easily sold at the standard selling price. Which type of flamethrower would be the most profitable for FG to produce? (Show your work)
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