ABC company produces two products. The marketing department expects that the company can sell 1,000 units of regular product and 1,100 units of luxury product each month. The company provides the following information:

Monthly fixed cost for FIVE machines used to manufacture both products is $150,000. It takes 1 machine hour to produce regular product and 2 hours to produce luxury product. Each machine has a capacity of 600 hours/month.

a. What is the maximum profit that the company can make in January?

b. The marketing department figured out in January that the customers are willing to buy luxury product at price $350. Should the company revise its production plan in February? What would be the profit with the new plan?

*Please show all your work*

Unit sales price Unit variable cost Regular $210 $110 Luxury $300 $130