Question

Jenny's bakery makes two types of birthday cakes: yellow cake, which sells for $25, and strawberry cake, which sells for $35. Both cakes are the same size, but the decorating and assembly time required for the yellow cake is 2 hours while the time is 3 hours for the strawberry cake. There are 450 hours of labor available for production. How many of each type of cake should be made to maximize revenue?

Answer 1

Answer: Revenue is maximum at x=25 and y=0. That is when the firm makes only yellow cakes and no strawberry cakes.

Explanation:

x- Number of Yellow cakes

y- Number of Strawberry cakes

Time constrain is given by

$2x+3y\leq 450$

$x\geq 0$

$y\geq 0$

Revenue is given by,

$TR= 25x + 35y$

At the vertices, revenue is

At (0,0)

TR = $0

At (0,150)

$TR = 25(0) + 35(150) = 5,250$

At (225,0)

$TR = 25(225) + 35(0) = 5,625$

Therefore, Revenue is maximum at x=25 and y=0. That is when the firm makes only yellow cakes and no strawberry cakes.