Chris Eastus has just opened the Eastus Company. The company makes four products:

	A1	B2		C3			D4
Selling price	$84	$20		$56			$70
Direct material per unit	8 lbs.	2 lbs.		5 lbs.			3 lbs
Direct labor and Var OVH costs per unit	$28	$5		$27			$40
Fixed costs $10,000/month

All four products use the same direct material, Bistide, which costs $3 per pound. Due to restrictions by the vendor, Eastus Company can buy only 5000 pounds of Bistide each month. Demand for the Eastus Company products far exceeds the Bistide available. Due to contractual obligations, Eastus Company must produce at least 200 units of each of the four products each month.

You just began work as the controller and Chris Eastus has asked you to recommend, via memorandum, how many units of each product Eastus Company should produce each month and what the firms operating income would be for a typical month with this recommended product mix.

Secondly, Chris Eastus has a lead on an additional source for more Bistide she may be able to obtain an additional 1000 pounds per month from a second vendor. In the same memo, tell her the maximum price per pound you recommend she should pay for this additional 1000 pounds of Bistide and why. Explain which product(s) (and how many) she should make with it and how much total extra she could net for each $0.01 less than your recommended maximum price per pound she is able to negotiate.