Question
Jayleen company makes two products: Carpet Kleen and Floor Deodorizer. Operating information from the previous year follows: Units produced and sold of Carpet Kleen =
Jayleen company makes two products: Carpet Kleen and Floor Deodorizer. Operating information from the previous year follows:
Units produced and sold of Carpet Kleen = 5,000
Units produced and sold of Floor Deodorizer = 4,000
Machine hours used for Carpet clean = 5,000
Machine hours used for Floor Deodorizer = 1,000
Sales price per unit of carpet clean = $9
Sales price per unit of Floor Deodorizer = $15
Variable cost per unit of Carpet Clean = $7
Variable cost per unit of Floor deodorizer = $13
Fixed costs of $37,000 per year are presently allocated equally between both products. If the product mix were to changed, total fixed costs would remain the same.
Assuming there is unlimed demand for both products and Jaleen has 18,500 hours available, how many units of each product should be produced and sold?
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