A Company Makes Products a and B from 2 Resources,labor

question 3

Multiple Choice

A company makes products A and B from 2 resources,labor and material.The company wants to determine the selling price which will maximize profits.A unit of product A costs 25 to make and demand is estimated to be 20 ?
) 10 * Price of A.A unit of product B costs 18 to make and demand is estimated to be 30 ? .07 * Price of B.The utilization of labor and materials and the available quantity of resources is shown in the table.A reasonable price for the products is between 100 and 200.
$\begin{array}{lccc}\text { Product } & \text { A } & \text { B } & \text { Available resources } \\\hline \text { Labor hr/unit) } & 3 & 2 & 150 \\\text { Material ounces/unit) } & 1 & 2 & 200 \\\text { Manufacturing cost\$/unit) } & 25 & 18 & \\\text { Demand units) } & 20- & 30- & \\& 0.10^{*} \mathrm{P} 1 & 0.07^{*} \mathrm{P}_{2} &\end{array}$

Let X₁ = demand for As and X₂ = demand for Bs.Let P₁ = price for As and P₂ = price for Bs.
The objective function for this problem is?

• A)\(\operatorname { MAX } 25 X _ { 1 } + 18 X _ { 2 }\)
• B)\(\left. \left. \operatorname { MAX } 20- 0.1 0 ^ { * } \mathrm { p } _ { 1 } \right) \mathbf { X } _ { 1 } + 3 0- 0.07* \mathrm { p } _ { 2 } \right) \mathbf { X } _ { \mathbf { 2 } }\)
• C)\(\operatorname{MAX} 20 P_{1}-0.1 P_{1}^{2}+30 P_{2}-0.07 P_{2}^{2}-1040\)
• D)\(\operatorname{MAX} 22.5 P_{1}-0.1 P_{1}^{2}+31.26 P_{2}-0.07 P_{2}^{2}-1040\)

---

Definitions:

GASB Concepts Statement No. 1

A document issued by the Governmental Accounting Standards Board outlining objectives and concepts that guide the development of accounting and financial reporting standards for state and local governments.

Primary Users

The main audience or recipients of financial reports, typically considered to be existing and potential investors, lenders, and other creditors.

Capital Projects Fund

A governmental accounting fund used to account for financial resources set aside for the acquisition or development of major capital assets.

Governmental Fund Financial Statements

Financial reports that focus on the sources, uses, and balances of governmental funds and provide insight into fiscal accountability.