Product a Requires 5 Machine Hours Per Unit to Be

question 140

Multiple Choice

Product A requires 5 machine hours per unit to be produced,Product B requires only 3 machine hours per unit,and the company's productive capacity is limited to 240,000 machine hours.Product A sells for $16 per unit and has variable costs of $6 per unit.Product B sells for $12 per unit and has variable costs of $5 per unit.Assuming the company can sell as many units of either product it produces,the company should:

• A)Produce only Product A.
• B)Produce only Product B.
• C)Produce equal amounts of A and B.
• D)Produce A and B in the ratio of 62.5% A to 37.5% B.
• E)Produce A and B in the ratio of 40% A and 60% B.

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Definitions:

High Expectations

The belief or hope that someone or something will achieve a high level of performance or success.

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