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How many of each model should donto produce

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Question - 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?

Tonto: 2,250; Pronto: 0

Tonto: 0; Pronto: 5,625

Tonto: 0; Pronto: 4,375

Tonto: 1,125; Pronto: 2,812

Reference no: EM131820581

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