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:

Hypothesis

A hypothesis is a proposed explanation or assumption for a phenomenon or a relationship between variables that can be tested through research and experimentation.

Null Hypothesis

The null hypothesis is a statement in statistics that suggests no significant effect or relationship exists in the population; it is the hypothesis that a statistical test aims to disprove.

Alternative Hypothesis

In hypothesis testing, the hypothesis that there is a significant difference between specified populations, which is considered if the null hypothesis is rejected.

Statistical Evidence

Data or information collected during an experimental or observational study that supports or refutes a statistical hypothesis.