Speedy Printers operates a printing press with a monthly capacity of 1,000 machine- hours. Speedy has two main customers: Ace Corporation and Jacks Corporation. Data on each customer for January are:

Jacks Corporation indicates that it wants Speedy to do an additional $ 40,000 worth of printing jobs during February. These jobs are identical to the existing business Speedy did for Jacks in January in terms of variable costs and machine- hours required. Speedy anticipates that the business from Ace Corporation in February will be the same as that in January. Speedy can choose to accept as much of the Ace and Jacks business for February as its capacity allows. Assume that total machine- hours and fixed costs for February will be the same as in January.

What action should Speedy take to maximize its operating income? Show yourcalculations.

  • CreatedJanuary 15, 2015
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