Schultz’s Orchard grows two types of fruit—melons and strawberries—and over the
ID: 1206348 • Letter: S
Question
Schultz’s Orchard grows two types of fruit—melons and strawberries—and over the years it has been able to chart two production levels and resulting total costs. The following table compares the two levels, where strawberries are measured in flats and melons are measured in cartons:
strawberries are measured in flats and melons are measured in cartons:
Production Level A
Production Level B
Strawberries
Melons
Strawberries
Melons
2700
0
4200
2400
600
3600
900
1800
1200
2700
1800
1200
1500
2100
2100
750
1650
900
2550
0
1800
0
2700
Total Cost of A: $15,000
Total Cost of B: $25,000
This year it is expected that the price of strawberries will be $10 per flat and melons will be $15 per carton.
What is the best production mix at each cost level?
What will Schultz’s profit be at each production level?
Production Level A
Production Level B
Strawberries
Melons
Strawberries
Melons
2700
0
4200
2400
600
3600
900
1800
1200
2700
1800
1200
1500
2100
2100
750
1650
900
2550
0
1800
0
2700
Total Cost of A: $15,000
Total Cost of B: $25,000
Explanation / Answer
The table provides the investigation in the production done by Schultz:
With this year price of strawberries be $10 and melons be $15, the two production systems provide the best mix that ensures the highest profit.
The best production mix at level A is 1800 strawberries and 1200 melons giving a profit of 21000.
The best production mix at level B is 2700 strawberries and 1800 melons giving a profit of 29000.
Production Level A Production Level B Strawberries Melons Total revenue Profit Strawberries Melons Total revenue Profit 2700 0 27000 12000 4200 42000 17000 2400 600 33000 18000 3600 900 49500 24500 1800 1200 36000 21000 2700 1800 54000 29000 1200 1500 34500 19500 2100 2100 52500 27500 750 1650 32250 17250 900 2550 47250 22250 0 1800 27000 12000 0 2700 40500 15500 Total Cost of A: $15,000 Total Cost of B: $25,000Related Questions
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