Computer Products Produces Two Keyboards, Regular and Special

question 63

Multiple Choice

Computer Products produces two keyboards, Regular and Special. Regular keyboards have a unit contribution margin of $128, and Special keyboards have a unit contribution margin of $720. The demand for Regulars exceeds Computer Product's production capacity, which is limited by available machine-hours and direct manufacturing labor-hours. The maximum demand for Special keyboards is 80 per month. Management desires a product mix that will maximize the contribution toward fixed costs and profits. Direct manufacturing labor is limited to 1,600 hours a month and machine-hours are limited to 1,200 a month. The Regular keyboards require 20 hours of labor and 8 machine-hours. Special keyboards require 34 labor-hours and 20 machine-hours.
Let R represent Regular keyboards and S represent Special keyboards. The correct set of equations for the keyboard production process is:

• A) Maximize: $128R + $720S
• Constraints:
• Labor-hours: 20R + 34S ≤ 1,600
• Machine-hours: 8R + 20S ≤ 1,200
• Special: S ≤ 80
• S ≥ 0
• Regular: R ≥ 0
• B) Maximize: $128R + $720S
• Constraints:
• Labor-hours: 20R + 34S ≥ 1,600
• Machine-hours: 8R + 20S ≥≤ 1,200
• Special: S ≥ 80
• S ≥ 0
• Regular: R ≥ 0
• C) Maximize: $720S + $128R
• Constraints:
• Labor-hours: 20R + 8S ≤ 1,600
• Machine-hours: 34R + 20S ≤ 1,200
• Special: S ≤ 80
• S ≥ 0
• Regular: R ≥ 0
• D) Maximize: $128R + $720S
• Constraints:
• Labor-hours: 20R + 34S ≤ 1,600
• Machine-hours: 8R + 20S ≤ 1,200
• Special: S ≥ 80
• S ≤ 0
• Regular: R ≤ 0

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