Smythe Manufacturing Has 27,000 Labor Hours Available for Producing X

question 56

Multiple Choice

Smythe Manufacturing has 27,000 labor hours available for producing X and Y. Consider the following information: $\begin{array}{lcc}&\text { Product X } &\text { Product Y }\\\text { Required labor time per unit (hours) } & 2 & 3 \\\text { Maximum demand (units) } & 6,000 & 8,000 \\\text { Contribution margin per unit } & \$ 5.00 & \$ 6.00 \\\text { Contribution margin per labor hour } & \$ 2.50 & \$ 2.00\end{array}$ If Smythe follows proper managerial accounting practices, how many units of Product Y should it produce?

• A) 8,000.
• B) 4,500.
• C) 6,000.
• D) 5,000.
• E) 1,500.

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