Figure 25-6
Anderson Company Manufactures Two Different Products: a and B

question 21

Multiple Choice

Figure 25-6
Anderson Company manufactures two different products: A and B. The company has 100 kgs of raw materials and 300 direct labour-hours available for production.
The time requirements and contribution margins per unit are as follows: $\begin{array}{lcr}&A&B\\\text { Raw materials per unit (lbs.) } & 1 & 2 \\\text { Direct-labour hours per unit } & 4 & 2 \\\text { Contribution margin per unit } & E 4 & E 5\end{array}$
-Refer to Figure 25-6. What is the equation for the constraint on raw materials?

• A)£1A + £2B < 100
• B)£4A + £2B < 100
• C)£4A + £5B < 100
• D)£4A + £5B < 300

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Definitions:

Product

Any item or service offered to the market for consumption, use, or acquisition.

Merchandise Inventory

Goods that a company holds for the purpose of selling to customers in the ordinary course of business.

Monthly Depreciation

The portion of a fixed asset's cost allocated as an expense over a single month, reflecting the asset's decrease in value over time.

Accounts Payable

Accounts Payable is the amount of money owed by a business to its suppliers or creditors for goods and services purchased on credit.