Sherman Company Can Sell All of Its Products a and Z

question 8

Multiple Choice

Sherman Company can sell all of its products A and Z that it can produce, but it has limited production capacity. It can produce 6 units of A per hour or 10 units of Z per hour, and it has 20,000 production hours available. Contribution margin per unit is $12 for A and $10 for Z. What is the most profitable sales mix for this company?

• A) 84,000 units of A and 60,000 units of Z.
• B) 48,000 units of A and 80,000 units of Z.
• C) 60,000 units of A and 100,000 units of Z.
• D) 120,000 units of A and 0 units of Z.
• E) 0 units of A and 200,000 units of Z.

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Definitions:

Executive Summary

A brief, comprehensive synopsis of a report or proposal, highlighting its key points, findings, and recommendations.

Title Page

The first page of a document that includes the title, author, and often times the publication date and publisher.

Table of Contents

A list found at the beginning of a document, book, or report, detailing the titles or descriptions of its sections and the pages on which they start.

Held-to-maturity

A classification for investment securities that a company has the intent and ability to hold until they mature, typically applicable to debt securities.