Donto can sell as many buckets as it can produce of either

Reference no: EM13478014

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?

Reference no: EM13478014

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