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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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