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

question 11

True/False

A company sells two products with information as follows:
$$\begin{array} { | l | r | l | } \hline & { \text { A } } & { \text { B } } \\\hline \text { Sales price per unit } & \$ 18 & \$ 26 \\\hline \text { Variable cost per unit } & \$ 7 & \$ 16 \\\hline\end{array}$$ Products are made by machine.Five units of product A can be made with three machine hours and five units of product B can be made with 0.6 machine hour.If there are no constraints on production or sales of either product,then the company should emphasize sales of product B.

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Definitions:

Selling Price

The amount for which a product or service is sold to a customer.

Variable Costs

Costs that change in proportion to the level of production or business activity.

Cost Center

A department or unit within an organization to which costs can be allocated, but that does not directly generate revenue.

Performance Evaluation

The systematic process of assessing and reviewing an employee’s job performance and productivity in relation to established criteria and objectives.