A product may be made using machine I or machine II. The manufacturer estimates that the monthly fixed costs of using machine I are $18,000, whereas the monthly fixed costs of using machine II are $15,000. The variable costs of manufacturing 1 unit of the product using machine I and machine II are $10 and $20, respectively. The products sell for $50 each. What is the maximum profit if the projected sales are 650 units?
a. $8,150
b. $8,100
c. $8,000
d. $8,200
e. $8,050
Can someone please explain this?
Thank you.
1 answer
Answer is c 8,000 machine I