Question
Deatter Co. is a manufacturer of office furniture. It sells two products: X and Y. Cost information is listed below: Product X Product Y Selling
Deatter Co. is a manufacturer of office furniture. It sells two products: X and Y. Cost information is listed below:
Product X Product Y
Selling price $490 $560
Variable costs 280 420
Contribution $210 $140
Machine hours to produce one unit 0.8 0.4
Maximum unit sales per month 525 700
The company presently operates the machine for a single eight-hour shift for 23 working days each month. Management is thinking about operating the machine for two shifts, which will increase the machine's availability by another eight hours per day for 23 days per month. This change would require additional fixed costs of $5,000 per month.
If the company decides to set up the new shift, what is the objective formula for the month?
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