Donto Company produces two models of buckets, Tonto and Pronto. Information regarding these products for May follows:
|
|
Tonto
|
Pronto
|
|
Number of units
|
3,000
|
7,000
|
|
Sales revenue
|
$120,000
|
$140,000
|
|
Variable costs
|
60,000
|
42,000
|
|
Fixed costs
|
24,000
|
50,000
|
|
Net Income
|
$36,000
|
$48,000
|
|
Pounds of plastic to produce one bucket
|
4.0
|
1.6
|
|
Contribution margin per unit
|
$20
|
$14
|
Due to increased demand of plastic in the market, Donto Company can obtain only 9,000 pounds of plastic per month. Donto can sell as many buckets as it can produce of either model. How many of each model should Donto produce to maximize profit in May considering the constraint?