A Company Can Sell Any Mix of Product a and Product

question 73

Multiple Choice

A company can sell any mix of Product A and Product B at full capacity.The company has 100,000 hours of capacity.The demand for each product exceeds the capacity.It takes one hour to make one unit of Product A and two hours to make one unit of Product B.The following information is available:
$\begin{array}{ll}&\text { Product A }&\text { Product B }\\\text { Units produced from capacity available }&100,000 & 50,000 \\\text { Contribution margin per unit }&\$ 20 & \$ 30\end{array}$
If capacity is the limiting factor,which product should be produced?

• A) 0 units of Product A and 50,000 units of Product B
• B) 20,000 units of Product A and 30,000 units of Product B
• C) 30,000 units of Product A and 20,000 units of Product B
• D) 100,000 units of Product A and 0 units of Product B

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Definitions:

Unemployment Rate

The percentage of the labor force that is jobless and actively seeking employment.

Unions

Unions are organized groups of workers who come together to make decisions about the conditions of their work, including wages, benefits, and working conditions.

Working Hours

The duration of time employees are expected to work during a specified period, typically measured in hours per week.

Income Security

Measures and policies in place to ensure individuals have a stable source of income, particularly during periods of unemployment or retirement.