Smooth, Inc. makes metal-plated and ceramic hair-straighteners. Metal-plated and ceramic straighteners sell for $28 and $20, respectively, and have unit variable costs of $12 and $15, respectively. The company has limited machinery, which can only be run for 3,000 machine hours per period. Ten metal-plated straighteners can be made per hour on the machine, whereas 15 ceramic straighteners can be made per hour on the machine. Fixed costs amount to $100,000 per period.

Assuming demand is unlimited, answer the following questions:

1) How many of each type of straightener should be made?

2) What is the companys operating income given this product mix?

Assume demand is limited to 20,000 metal-plated straighteners and 20,000 ceramic straighteners per period.

3) How many of each type of straightener should be made?

4) What is the companys operating income under this product mix?