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

question 150

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 optimum product mix to maximize company's operating income?

• A) 2,000 units of A; 4,000 units of B
• B) 6,000 units of A; 3,000 units of B
• C) zero units of A; 3,000 units of B
• D) 12,000 units of A; zero units of B

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Definitions:

Internal Characteristics

Traits or features that originate within an individual or entity, defining their innate qualities or attributes.

Dependency Theorists

Scholars who argue that economic disparities between nations arise from the exploitation of poorer countries by wealthier ones, leading to a state of dependency.

Multinational Corporations

Entities that operate in multiple countries beyond their home base, usually to maximize market reach and optimize production costs.

Rich Countries

Nations with high gross domestic product (GDP) per capita, indicating a high level of economic prosperity and standard of living.