Witch's Brew Company manufactures and sells three potions that all use gargoyle eyelashes as an ingredient. The high demand for all three of these potions exceeds the supply of gargoyle eyelashes that Witch's Brew is able to buy from its suppliers. Information related to the three potions is provided below:

Passion Potio

Selling price per bottle of potion               $100

Variable cost per bottle of potion             $70

Eyelashes required per bottle of potion                2             

Maximum annual demand (in bottles)   1,000    

Luck Potion        

Selling price per bottle of potion               $120

Variable cost per bottle of potion             $84

Eyelashes required per bottle of potion                3             

Maximum annual demand (in bottles)   1,500

Smart Potion     

Selling price per bottle of potion               $200

Variable cost per bottle of potion             $130

Eyelashes required per bottle of potion                5             

Maximum annual demand (in bottles)   1,800

Each year, Witch's Brew is only able to buy 6,000 gargoyle eyelashes. Annual fixed costs at Witch's Brew are $45,000.

Requirements

What is the maximum annual net operating income that Witch's Brew can make each year?       

Answer rating: 100% (QA)

Passion Potion Luck Potion Smart Potion Selling price per bottle of potion 100 120 ... View the full answer