Custom Furniture Manufactures a Small Table and a Large Table

question 143

Multiple Choice

Custom Furniture manufactures a small table and a large table. The small table sells for $900, has variable costs of $560 per table, and takes ten direct labor hours to manufacture. The large table sells for $1,500, has variable costs of $980, and takes eight direct labor hours to manufacture. The company has a maximum of 5,000 direct labor hours per month when operating at full capacity. If there are no constraints on sales of either product, and the company could choose any proportions of product mix that they wanted, what is the optimum product mix to maximize operating income of the company?

• A)400 units of small, 125 units of large
• B)zero units of small, 625 units of large
• C)100 units of small, 500 units of large
• D)500 units of small, zero units of large

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Definitions:

Company-Issued Smartphones

Smartphones provided by a company to its employees for work-related purposes, often containing business apps and secure data access.

Unpaid Overtime

The earnings employees are entitled to receive for hours worked beyond their standard working hours, which have not been compensated.

Decrease In Quality Of Life

A deterioration in an individual's or community's standard of living and well-being.

Mandatory Arbitration

A legal process where disputing parties are required to resolve their differences through an arbitrator, rather than through the court system.