Watson Corporation Manufactures Two Products, XX and YY Assume Watson Corporation Could Produce and Sell Any Mix of Information

question 153

Multiple Choice

Watson Corporation manufactures two products, XX and YY. The following information was gathered: $$\begin{array} { l l l } & X X & Y Y \\\text { Selling price } p \text { er unit } & \$ 47.00 & \$ 26.00 \\\text { V ariable cost per unit } & 42.00 & 22.00 \\& & \\\text { Total fixed costs } & \$ 18,000\end{array}$$ Assume Watson Corporation could produce and sell any mix of product XX and YY at full capacity. If product XX takes 50% longer to manufacture as product YY and only 120,000 hours of plant capacity are available, it is best for Watson to produce:

• A) either XX or YY, there is no difference
• B) an equal number of XX and YY
• C) only YY
• D) only XX

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Definitions:

Attribute

A quality or feature regarded as a characteristic or inherent part of someone or something.