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7 years ago
Isabelle's Furniture manufactures a small table and a large table. The small table sells for $700, has variable costs of $560 per table, and takes 10 direct labor hours to manufacture. The large table sells for $1,600, has variable costs of $970, and takes eight direct labor hours to manufacture. The company has a maximum of 5,000 direct labor hours per month when operating at full capacity. If there are no constraints on sales of either product, and the company could choose any proportions of product mix that they wanted, what is the optimum product mix to maximize operating income of the company?
A) 625 units of small and 500 units of large
B) 500 units of small and 0 units of large
C) 0 units of small and 625 units of large
D) 500 units of small and 625 units of large
Textbook 
Horngren's Financial & Managerial Accounting, The Financial Chapters

Horngren's Financial & Managerial Accounting, The Financial Chapters


Edition: 5th
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7 years ago
This was certainly a tough question, loving the expertise
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