Pappy?s Toys makes two models of a metal toy?Standard and DeLuxe.

Both models are produced on a single machine. The price and costs of the two models appear as follows.

The one machine that used to produce both models has a capacity of 90,000 machine-hours per quarter. Fixed manufacturing costs per quarter are $800,000.

Requireda. Suppose that the maximum unit sales in a quarter that Pappy?s can achieve is 200,000 units of each product. How many units of each model should Pappy?s produce in a quarter?b. Suppose that the maximum unit sales in a quarter that Pappy?s can achieve is 120,000 units of each product. How many units of each model should Pappy?s produce in a quarter?

Transcribed Image Text:

Standard DeLuxe Price per unit Variable cost per unit Machine hours per unit $60 $40 $24 $20 0.5 1.5