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

question 2

Multiple Choice

A company sells two products with information as follows: $$\begin{array} { | l | r | r | } \hline & \mathrm { A } & \mathrm { B } \\\hline \text { Sales price per unit } & \$ 12.00 & \$ 28.00 \\\hline \text { Variable cost per unit } & \$ 10.00 & \$ 12.00 \\\hline\end{array}$$ The products are machine made.Four units of product A can be made with one machine hour and two 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 18,000 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) 1,500 units of A and 60,000 units of B
• B) 6,000 units of A and 3,000 units of B
• C) zero units of A and 3,000 units of B
• D) 12,000 units of A and zero units of B

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Definitions:

Registration Statement

A registration statement is a set of documents, including a prospectus, filed with the SEC by a company intending to go public, detailing its business and financial status.

Willfully Violates

Refers to the act of intentionally breaking a law or regulation.

Securities Act of 1933

A U.S. law enacted in response to the stock market crash of 1929 that aims to ensure more transparency in financial statements so investors can make informed decisions.

Fines

Penalties of monetary payment imposed by a court on a person or organization as punishment for an offense.