A Company Sells Two Products with Information as Follows Products Are Made by Machine

question 117

Multiple Choice

A company sells two products with information as follows:
$$\begin{array} { | l | r | r | } \hline &{ \text { A } } & { \text { B } } \\\hline \text { Price per unit } & \$ 10.00 & \$ 16.00 \\\hline \text { Variable cost per unit } & \$ 8.00 & \$ 11.00 \\\hline\end{array}$$
Products are made by machine. 4 units of Product A can be made with one machine hour and 2 units of Product B can be made with one machine hour. The company has a maximum of 2,000 machine hours available per month.
-The company can sell up to 5,000 units of Product A per month, and up to 2,000 units of Product B for the month. What is the maximum amount of contribution margin that the company could earn in a month given the stated constraints?

• A) $16,000
• B) $18,000
• C) $20,000
• D) $22,000

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Definitions:

Servo Action

A mechanism that uses feedback to control a device, commonly found in systems requiring precise control of position or speed.

Anchor

A device used to connect a vessel to the bed of a body of water to prevent the craft from drifting due to wind or current.

Leading-Trailing Brake Designs

A drum brake configuration where one brake shoe is positioned to lead and press against the drum due to rotational forces, and the other trails and provides lesser braking force.

Anchor

A device used to connect a vehicle to the ground to prevent it from moving, or a metaphor for something that provides stability.