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Home Q & A Board Other Fields Homework Help Business Accounting
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7 years ago
A company sells two products with information as follows:

   A   B
Sales price per unit   $12.00   $24.00
Variable cost per unit   $10.00   $12.00

The products are machine made.  Four units of product A can be made with one machine hour and two units of product B can be made with one machine hour. The company has a maximum of 6,000 machine hours available per month. The company can sell up to 18,000 units of product A per month, and up to 3,000 units of product B for the month. What is the optimum product mix to maximize company's operating income?
A) zero units of A and 3,000 units of B
B) 1,500 units of A and 72,000 units of B
C) 18,000 units of A and 3,000 units of B
D) 36,000 units of A and zero units of B
Textbook 
Horngren's Financial & Managerial Accounting, The Financial Chapters

Horngren's Financial & Managerial Accounting, The Financial Chapters


Edition: 5th
Authors:
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7 years ago
Will mark this subject solved, thanks
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