Question
HEARTBEAT produces two activity tracker bracelets: the Mini and the Maxi. The company can sell its entire production of either bracelet. The relevant information for
HEARTBEAT produces two activity tracker bracelets: the Mini and the Maxi. The company can sell its entire production of either bracelet. The relevant information for these two products is:
Mini Maxi
Machine time per bracelet (hours) 2 5
Selling price per bracelet $100 $200
Variable costs per bracelet $20 $40
Total fixed overheads are $240,000. The company has only 100,000 machine hours available for production. Because of the constraint on the maximum number of machine hours, the company needs to decide which bracelet to produce to maximise the companys profit
Required: Which product should the company select to maximise profits?
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