candles must be chilled in a refridgerator for them to set 1

properly. The company only has one fridge. Because of the

size of the large candles, the company can cool 6 cases of
large candles per hour. It can cool 9 cases of small
candles per hour. The company can sell as many candles as
it can produce. The fridge can be used for 180 hours per
month.

Per Case

Large Candles Small Candles

Price P 20.00 P 12.50

Variable Cost 12.00 6.50

CM 8.00 6.00

Fixed Cost P 6,000

✖ What is the optimal product mix in units? How much profit

will the company make if it produces the optimal product
mix?

✖ What if the company can sell no more than 1,350 cases of

either type of candle? What is the optimal product mix in
units? How much profit will the company make if it produces
 2

Large Small
CM/unit P8 P6
Cases/hr x6 x9
CM/hr P 48 P 54

9 cases/hr x 180 hrs = 1,620 candles

180 hrs x P 54/hr = P 9, 720
CM P 9,720 - FC P 6,000 = P 3,720 profit
 3

1,350 cases ÷ 9 cases/hr = 150 hrs for small

candle production

180 hrs available for use - 150 hrs for small = 30

hrs available for large candle production

30 hrs x 6 cases/hr = 180 large candles

Large Small
Units 180 1,350
CM/unit xP8 xP6
CM P 1,440 P 8,100

CM (P1,440+8,100) - FC P 6,000 = P 3,540

profit