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The Ramos Company manufactures two products: Treadmills and Elliptical Trainers. The costs and revenues are as follows: Sales price per unit Elliptical Treadmill Trainer
The Ramos Company manufactures two products: Treadmills and Elliptical Trainers. The costs and revenues are as follows: Sales price per unit Elliptical Treadmill Trainer $175 85 $300 Variable cost per unit 160 Total demand for the Treadmill product is 7,000 units and for the Elliptical Trainer product is 5,000 units. Machine time is a scarce resource. During the year, 48,000 machine hours are available. A Treadmill requires 6 machine hours per unit, while an Elliptical Trainer requires 2.5 machine hours per unit. Required: a. How many units of Treadmills and Elliptical Trainers should Ramos produce? b. What will be the maximum possible contribution margin?
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