Question
Pappy's Toys makes two models of a metal toyStandard and DeLuxe. Both models are produced on a single machine. The price and costs of the
Pappy's Toys makes two models of a metal toyStandard and DeLuxe. Both models are produced on a single machine. The price and costs of the two models appear as follows. Standard DeLuxe Price per unit $ 110 $ 130 Variable cost per unit $ 48 $ 52 Machine hours per unit 0.5 1.5 The one machine that used to produce both models has a capacity of 104,000 machine-hours per quarter. Fixed manufacturing costs per quarter are $870,000. Required: a. Suppose that the maximum unit sales in a quarter that Pappy's can achieve is 228,000 units of each product. How many units of each model should Pappy's produce in a quarter? b. Suppose that the maximum unit sales in a quarter that Pappy's can achieve is 127,000 units of each product. How many units of each model should Pappy's produce in a quarter?
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