Santora Company manufactures two products—toaster ovens and bread machines
The following data are available:
Toaster Ovens Bread Machines
Sales price $70 $170
Variable costs $50 $70
Santora can manufacture six toaster ovens per machine hour and four bread machines per machine hour. Santora's production capacity is 2,000 machine hours per month, and it can sell as many units of either type as it can produce. Which product and how many units should the company produce in a month to maximize profits? (Round machine hour per unit to two decimal places and your final answer to the nearest whole dollar.)
A) 8,000 bread machines
B) 6,000 toaster ovens and 4,000 bread machines
C) 8,000 toaster ovens and 6,000 bread machines
D) 12,000 toaster ovens
A .A)
Toaster Bread
Sales price $70 $170
Variable costs 50 70
Contribution margin $20 $100
Number of units per hour 6 4
Contribution margin per machine hour $120.00 $400.00
Ranking 2 1
Hours available No. of units
Bread 2,000 2,000 x 4 = 8,000
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