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AC Inc. manufactures two models of air compressors: 6 gallon and 12 gallon. The following per unit data apply: Per Unit 6 Gallon 12 Gallon

AC Inc. manufactures two models of air compressors: 6 gallon and 12 gallon. The following per unit data apply:

Per Unit

6 Gallon

12 Gallon

Selling Price

$ 150

$ 300

Variable Costs

$ 80

$ 204

Allocated Fixed Costs

$ 20

$ 35

Number of Machine Hours Needed

4 hrs.

6 hrs.

AC Inc. is limited to 1,160 machine hours of capacity for the production of air compressors. Demand is 200 units of the 6 gallon compressor and 100 units of the 12 gallon compressor. How many units of 6 gallon and 12 gallon compressors respectively should AC Inc. produce to maximize profits?

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