Find the Maximum Production Level If the Total Cost

question 95

Multiple Choice

Find the maximum production level if the total cost of labor (at $70 per unit) and capital (at $48 per unit) is limited to $250,000, where x is the number of units of labor and y is the number of units of capital. Round your answer to the nearest integer.

• A) 35,164 units produced
• B) 12,055 units produced
• C) 24,390 units produced
• D) 243,897 units produced
• E) 15,229 units produced

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Definitions:

Work In Process Inventory

The account on the balance sheet representing the cost of the incomplete goods that are still in the process of production.

Equivalent Units

A concept in cost accounting used to allocate costs to partially completed goods, converting them into the amount of finished goods units they represent.

Equivalent Units

A concept in cost accounting used to apportion costs to partially completed goods, expressed in terms of fully completed units.

Direct Labor

The payment for labor of employees directly involved in the generation of goods or the provision of services.