A Company Has 10,000 Hours of Capacity and Manufactures Two

question 126

Multiple Choice

A company has 10,000 hours of capacity and manufactures two products.Product 1 takes 2 hours per unit.Product 2 takes 3 hours per unit.The contribution margin per unit for Product 1 is $5.The contribution margin per unit for Product 2 is $6.The demand for either product exceeds the factory capacity.Which product or products should be manufactured?

• A) 3,000 units of Product 1 and 2,000 units of Product 2
• B) 2,500 units of Product 1 and 3,333 units of Product 2
• C) make 5,000 units of Product 1 and 0 units of Product 2
• D) make 3,333 units of Product 2 and 0 units of Product 1

Identify the concept of watered shares and the responsibility of the board of directors in share valuation.

Explain the process of capitalizing a newly formed corporation, including issuing equity and debt securities.

Understand the legal framework under the Model Business Corporation Act (MBCA) regarding share issuance, promoter's liability, and shareholder rights.

Recognize the role of promoters before the corporation's formation and the extent of their liability.

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