The Squash Company Has 5,500 Machine Hours Available Annually to Manufacture

question 105

Multiple Choice

The Squash Company has 5,500 machine hours available annually to manufacture racquets.
The following information is available for the two different racquets produced by Squash:
$\begin{array}{|l|r|}\hline \text { Pro } & \\\hline \text { Unit sales price } & \$ 200 \\\hline \text { Unit variable costs } & \$ 120 \\\hline \text { Annual demand } & 2,000 \text { units }\\\hline \text { Machine time } & \text { 2 hours per unit } \\\hline \text { Mid } & \\\hline \text { Unit sales price } & \$ 120 \\\hline \text { Unit variable costs } & \$ 66 \\\hline\text { Annual demand } & 4,000 \text { units } \\\hline\text { Machine time } & 1.25 \text { hours per unit }\\\hline\end{array}$

How many units of each racquet should be manufactured for Squash to maximize its operating income?

• A) 2,000 units of Pro and 1,200 units of Mid
• B) 4,000 units of Mid and 250 units of Pro
• C) 2,000 units of Pro and 4,000 units of Mid
• D) 4,000 units of Mid and 500 units of Pro

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