If Constraints in a Linear Programing Problem Take the Form

question 31

Multiple Choice

If constraints in a linear programing problem take the form 2X + Y  800 and X + 2Y  700.The optimal solution is:

• A)X = 300 and Y = 200.
• B)X = 200 and Y = 300.
• C)X = 100 and Y = 300.
• D)X = 400 and Y = 0.
• E)X = 200 and Y = 400.

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Definitions:

Margin of Safety

Margin of Safety is the difference between actual sales and the break-even point, indicating the amount of sales decline a company can sustain before incurring a loss.

CVP Income Statement

An income statement format that is used to analyze the impact of varying levels of sales and product costs on operating profit, focusing on the relationships between cost, volume, and profit.

Management Decision-Making

The process by which management identifies, evaluates, and chooses among alternative courses of action to achieve organizational objectives.

Traditional Income Statement

An income statement format that separates costs into categories of cost of goods sold and operating expenses to calculate net income.