Question
Toppers produces two models of hats, fedoras and berets, both made out of cool skin felt fabric. Information regarding the products is summarized for the
Toppers produces two models of hats, fedoras and berets, both made out of cool skin felt fabric. Information regarding the products is summarized for the month of May in the following table:
Fedoras | Berets | ||||
---|---|---|---|---|---|
Number of hats produced | 1,000 | 4,000 | |||
Sales revenue | $28,000 | $72,000 | |||
Variable costs | 12,000 | 36,000 | |||
Fixed costs | 3,200 | 7,000 | |||
Net Income | $12,800 | $29,000 | |||
Yards of fabric per unit | 0.80 yds. | 0.40 yds. | |||
Profit per unit | $12.80 | $7.25 |
Due to increased demand of hat felt in the market, Toppers can obtain only 3,800 yards of felt per month. Toppers can sell as many hats as it can produce, however, it must produce at least 800 of each to stay competitive. How many of each model of hat should Toppers make to maximize profit in June?
Fedoras | Berets | |||
---|---|---|---|---|
Number of Hats |
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