Answer the Following Questions Using the Information Below:
Aurum Appliances

question 112

Multiple Choice

Answer the following questions using the information below:
Aurum Appliances manufactures three sizes of kitchen appliances: small, medium, and large. Product information is provided below.
$\begin{array}{lcrrr}&\text { Small }&\text { Medium }&\text { Large }\\\text { Unit selling price }&\$400&\$600&\$1,200\\\text { Unit costs: }\\\text { Variable manufacturing } & (220) & (280) & (500) \\\text { F1×ed manufacturing } & (80) & (130) & (240) \\\text { Fixed selling and administrative } & (60) & (75) & (120) \\\text { Unit profit } & \$ 40 & \$ 115 & \$ 340\\\\\text { Demand in units } & 100 & 120 & 100 \\\text { Machine-hours per unit } & 20 & 40 & 100\end{array}$ The maximum machine-hours available are 6,000 per week.
-Which of the three product models should be produced first if management incorporates a short-run profit maximizing strategy?

• A) small appliance
• B) medium appliance
• C) large appliance
• D) both medium and large appliance

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Definitions:

Cross-functional

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Cross-functional

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