65.Product A requires 5 machine hours per unit to be produced, Product B require

Question

65.Product A requires 5 machine hours per unit to be produced, Product B requires only 3 machine hours per unit, and the company's productive capacity is limited to 240,000 machine hours. Product A sells for $16 per unit and has variable costs of $6 per unit. Product B sells for $12 per unit and has variable costs of $5 per unit. Assuming the company can sell as many units of either product as it produces, the company should:
A.Produce only Product A.
B.Produce only Product B.
C.Produce equal amounts of A and B.
D.Produce A and B in the ratio of 62.5% A to 37.5% B.
E.Produce A and B in the ratio of 40% A and 60% B.

Explanation / Answer

B

Related Questions

Navigate

• Browse (All)
• Browse 6
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.