Johnstone Company Makes Two Products: Carpet Kleen and Floor Deodorizer

question 54

Multiple Choice

Johnstone Company makes two products: Carpet Kleen and Floor Deodorizer. Operating information from the previous year follows. $$\begin{array} { l c c } & \text { Carpet Kleen } & \text { Floor Deodorizer } \\\text { Units produced and sold } & 5,000 & 4,000 \\\text { Machine hours used } & 5,000 & 2,000 \\\text { Sales price per unit } & \$ 7 & \$ 10 \\\text { Variable cost per unit } & \$ 4 & \$ 8\end{array}$$ Fixed costs of $20,000 per year are presently allocated equally between both products. If the product mix were to change, total fixed costs would remain the same.
Assuming there is unlimited demand for both products and Johnson has 10,000 machine hours available, how many units of each product should be produced and sold? $$\begin{array} { l l l } & \text { Carpet Kleen } & \text { Floor Deodorizer } \\\text { A. } & 0 \text { units } & 0 \text { units } \\\text { B. } & 0 \text { units } & 20,000 \text { units } \\\text { C. } & 5,000 \text { units } & 10,000 \text { units } \\\text { D. } & 8,000 \text { units } & 4,000 \text { units } \\\text { E. } & 10,000 \text { units } & 0 \text { units }\end{array}$$

• A) Choice A
• B) Choice B
• C) Choice C
• D) Choice D
• E) Choice E

---

Definitions:

Mitochondrion

An organelle found in large numbers in most cells, where it produces energy through cellular respiration.

Mitochondrion

A membrane-bound cell organelle that generates most of the chemical energy needed to power the cell's biochemical reactions.

Cardiac Muscle Cells

Specialized muscle cells found in the heart that have the unique ability to contract and relax without conscious thought, enabling the heart to pump blood.

ATP

ATP, or Adenosine Triphosphate, is the primary molecule for storing and transferring energy in cells, enabling various biological processes.