OF has a division of folding umbrellas which can produce two different type of umbrellas, OD which is made of polyster fabric and OS which is made of flame resistant fabric. The company has 10000 machine hours available to produce these products. One batch of OD require 5 machine hours and OS requires 8 machine hours.

How many of each product should OF produce for maximizing the profit of division of folding umbrella and why? Also show the maximum profit the division of folding umbrella can achieve.

Per Batch                                           OD.                       OS

Sales price                                      $2                       $6

Variable expenses                          $0.5                    $3

Contribution Margin                        $1.50                  $3

Contribution Margin Ratio               75%                   50%