Smash Company Has 4,000 Machine Hours Available Annually to Manufacture

question 105

Multiple Choice

Smash Company has 4,000 machine hours available annually to manufacture badminton racquets.The following information is available for the two different racquets produced by Smash: $$\begin{array} { | l | r | } \hline \text { Pro } & \\ \hline \text { Unit sales price } & \$ 400 \\\hline \text { Unit variable costs } & \$ 100 \\\hline \text { Annual demand } & 2,000 \text { units } \\\hline \text { Machine time } & \text { 1.5 hours per unit } \\ \hline \text { Mid } & \\ \hline \text { Unit sales price } &\$100\\\hline \text { Unit variable costs } &\$70 \\\hline \text { Annual demand } &\text { 5,000 units }\\\hline& \text { 2 hours per unit } \\\hline\end{array}$$ How many units of each racquet should be manufactured for the company to maximize its operating income?

• A)2,000 units of Pro and 1,500 units of Mid
• B)2,000 units of Pro and 500 units of Mid
• C)2,000 units of Pro and 5,000 units of Mid
• D)5,000 units of Mid and 500 units of Pro

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