Day Wave Company sells three products, Dusk, Dawn, and Twilight. Income statement data for the Company's...

  

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Day Wave Company sells three products, Dusk, Dawn, and Twilight. Income statement data for the Company's current year is provided below: Unit Sales Dusk 5,000 Dawn 10,000 Twilight 15,000 Totals 30,000 Revenue $ 200,000 $350,000 $375,000 $925,000 Variable Costs $ 75,000 $150,000 $135,000 $360,000 Fixed Costs 50,000 75,000 100,000 225,000 Total Costs $125,000 $225,000 $235,000 $585,000 Operating Income $ 75,000 $125,000 $140,000 $340,000 Assume the following additional information: Dusk Dawn Twilight Hours per unit 5 8 2 Maximum Unit Sales 6,000 15,000 30,000 8 out of 8 points Total Capacity is 100,000 hours. Day Wave Company suspects that profits are not being maximized at the current sales level. The company assigned you to compute how many units of each product would have to be sold in order to maximize profit. REQUIRED: 1) Under these circumstances, how many units of each product should the company produce to maximize profits? Dusk: [a] units Dawn: [b] units Twilight: [c] units 2) What would the Operating Income for the company be with the new sales level identified in 1) above. Operating Income: [d] Day Wave Company sells three products, Dusk, Dawn, and Twilight. Income statement data for the Company's current year is provided below: Unit Sales Dusk 5,000 Dawn 10,000 Twilight 15,000 Totals 30,000 Revenue $ 200,000 $350,000 $375,000 $925,000 Variable Costs $ 75,000 $150,000 $135,000 $360,000 Fixed Costs 50,000 75,000 100,000 225,000 Total Costs $125,000 $225,000 $235,000 $585,000 Operating Income $ 75,000 $125,000 $140,000 $340,000 Assume the following additional information: Dusk Dawn Twilight Hours per unit 5 8 2 Maximum Unit Sales 6,000 15,000 30,000 8 out of 8 points Total Capacity is 100,000 hours. Day Wave Company suspects that profits are not being maximized at the current sales level. The company assigned you to compute how many units of each product would have to be sold in order to maximize profit. REQUIRED: 1) Under these circumstances, how many units of each product should the company produce to maximize profits? Dusk: [a] units Dawn: [b] units Twilight: [c] units 2) What would the Operating Income for the company be with the new sales level identified in 1) above. Operating Income: [d]

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Answer To maximize profits for Day Wave Company we can use linear programming to find the optimal un... View the full answer