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A company produces two products. Each product can be produced on either of two machines. The time (in hours) required to produce each product on each machine is shown below: Each month, 600 hours of time are available on each machine, and that customers are willing to buy up to the quantities of each product at the prices that are shown below:
The company's goal is to maximize the revenue obtained from selling units during the next two months.
-What are the decision variables in this problem?
Conversion Costs
The combined costs of direct labor and overhead that are incurred to convert raw materials into finished products.
Raw Steel
The unprocessed product from melting iron ore, scrap steel, and other additives in a blast furnace, which is the base material for making steel products.
Process Cost System
A method of accounting used in manufacturing where costs are accumulated over a period and averaged over all units produced.
Work In Process Inventory
The direct materials costs, the direct labor costs, and the applied factory overhead costs that have entered into the manufacturing process but are associated with products that have not been finished.
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