Question
Brandon technology makes two models of a specialized sensor for aerospace industry. The difference in the two models relates to the required accuracy of the
Brandon technology makes two models of a specialized sensor for aerospace industry. The difference in the two models relates to the required accuracy of the sensor. The Standard model is used for most normal operations while the High-Performance models used for high-altitude and specialized missions. Before shipment, two models are passed through a machine that, among other things, certifies the accuracy of the sensor. The company only has one testing machine. The price and costs of the two sensor models are shown here:
Standard High-Performance
Price per Sensor $84 $128
Variable Cost Per Sensor $50 $57
Testing hours per sensor 0.04 0.10
The testing machine used for both models has a capacity of 8,410 hours annually. Fixed manufacturing costs are $3,200,000 annually.
A. Suppose that the maximum annual unit sales that is possible for Brandon Technology is 258,000 units of the standard model and 96,000 of the High-Performace model. How many units of each sensor should Brandon Technology produce annually?
B. Suppose that the maximum annual unit sales that is possible for Brandon Technology is 158,000 units of the standard model and 50,000 of the High-Performace model. How many units of each sensor should Brandon Technology produce annually?
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