An Ice Cream Company Is Planning Its Production for Next

question 73

Multiple Choice

An ice cream company is planning its production for next week. Demand for premium and light ice creams continues to outpace the company's production capacities. Two resources used in ice cream production are in short supply for next week. The mixing machine will be available for only 150 hours, and only 30000 gallons of high grade milk will be available. One hundred gallons of premium ice-cream requires 0.6 hour of mixing and 180 gallons of milk. One hundred gallons of light ice cream requires 1 hour of mixing and 140 gallons of milk. If company earns a profit of $100 per hundred gallons on both of its ice creams, how many gallons of premium and of light ice cream should company produce next week to maximize profit? How much profit will result? Round your profit to the nearest cent and another answers - to the nearest whole number. ​

• A)The company should produce 94 gallons of premium and 94 gallons of light ice cream to maximize the profit. The resultant maximum profit is $15,000.00 .
• B)The company should produce 94 gallons of premium and 94 gallons of light ice cream to maximize the profit. The resultant maximum profit is $18,750.00.
• C)The company should produce 94 gallons of premium and 94 gallons of light ice cream to maximize the profit. The resultant maximum profit is $16,666.67.
• D)The company should produce 69 gallons of premium and 69 gallons of light ice cream to maximize the profit. The resultant maximum profit is $13,800.00.
• E)The company should produce 119 gallons of premium and 119 gallons of light ice cream to maximize the profit. The resultant maximum profit is $23,800.00.

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Definitions:

Comprehensive Income

Comprehensive income includes all changes in equity during a period except those resulting from investments by owners and distributions to owners.

GAAP

Generally Accepted Accounting Principles, a set of accounting standards and procedures used in the United States to prepare and present financial statements in a consistent manner.

Financial Statements

Comprehensive reports that provide information about a company's financial performance and position, including its income statement, balance sheet, statement of cash flows, and statement of shareholder equity.

Other Comprehensive Income

A financial accounting term representing the revenues, expenses, gains, and losses that are not included in net income, affecting the equity section of the balance sheet outside of net income.