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

question 89

Multiple Choice

A company sells two products with information as follows: $$\begin{array} { | l | r | r | } \hline & { \text { A } } & { \text { B } } \\\hline \text { Price per unit } & \$ 12 & \$ 20 \\\hline \text { Variable cost per unit } & \$ 10 & \$ 12 \\\hline\end{array}$$ 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 3,000 machine hours available per month. The company can sell up to 7,000 units of Product A per month, and up to 3,000 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) $10,000
• B) $36,000
• C) $30,000
• D) $40,000

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Definitions:

Foraging Societies

Those in which people live by searching for wild plants and hunting wild animals. Such societies predominated until about 10,000 years ago. Inequality, the division of labor, productivity, and settlement size are very low in such societies.

Service Sector

A segment of the economy that involves providing services rather than producing goods, including industries like banking, healthcare, and education.

Class Inequality

The disparity in access to resources, opportunities, and rights among different social classes.

Gender Inequality

The social process by which people are treated differently and disadvantageously, under similar circumstances, on the basis of gender.