Part 3

MYOB estimates their market demand to be such that they could sell 1,500 mold candles, 800 jar candles and 2,000 lip balms per month.

However, due to a harsh winter and rampant Colony Collapse Disorder, there is a shortage of beeswax. MYOB is only able to buy 100 pounds of beeswax per month. Using what you learned in Module 13 and ignoring any previously states established product mix, advise MYOB on how many units of each product they should product to maximize profits, given the resource constraints presented by the wax shortage. (Module 13) (10 points)

Mind Your Own Beeswax (MYOB) is a small business that sells wax based products, including candles and lip balms. The sole owner of MYOB is Beatriz Hives. Beatriz would like some advice about her business and has reached out to you, her accountant, for help.

Read the facts about Mind Your Own Beeswax and use what youve learned to answer the questions.

Mind Your Own Beeswax (MYOB) makes and sells three products, candles made from silicone molds (mold candles), candles sold in a jar (jar candles) and tubes of lip balm (lip balm).

MYOB sells their products as two farmers markets each week, with the help of two employees. The employees help sell the products, but are not involved in the manufacturing process.

MYOB sells mold candles for $5 each, jar candles for $20 each and lip balms for $7 each.

Making the Products

MYOBs products are made from a combination of beeswax and coconut oil. Beeswax costs $8 per pound. Coconut oil costs $16 per pound. One pound of beeswax and pound of coconut oil can make a batch of 32 mold candles or a batch of 10 jar candles. Mold candles use one wick, while jar candles are made with three wicks each. Candle wicks cost $10 for a package of 1,000 wicks. One pound of beeswax and one pound of coconut oil can make one batch of 50 lip balms.

Both jar candles and lip balm are scented with essential oils. Essential oils cost $10 per bottle and one full bottle is used in making a batch of either product. Mold candles are unscented and do not require essential oil.

Mold candles are made using silicone molds that cost $15 each. A mold can be used to make 100 candles before it must be replaced.

The wax/coconut oil/essential oil mixture is poured into jars to make jar candles. The jars cost $1 each.

The lip balm product is poured into tubes that cost $12 for 80 tubes.

In addition to the product costs above, MYOB has two employees who each make $20 per hour. The employees each work two days per week and each shift is five hours. MYOB pays $300 per week for the booth at one Farmers Market and $200 per week for the booth at the second Farmers Market. They spend approximately $30 per week on gas to travel to the markets and $101 per week on marketing. MYOB only accepts credit cards. The credit card company