A company produces two products. Product A sells for $25, has variable costs of $15, and requires 2 machine hours to produce. Product B sells for $35, has variable costs of $20, and requires 2 machine hours to produce. 40,000 machine hours are available. The company can sell all it can make of either product. Which statement is true? The company should produce 8,000 units of Product A and 4,800 units of Product B.

Respuesta :

Answer:

The company should produce 8,000 units of Product A and 4,800 units of Product B.

Explanation:

A: CM=$25-15=10/2 hours=5 per machine hour. 8000 units x 2 machine hours=16,000 hours. 40,000 total hours available-16,000 hours for Product A leaves 24,000 hours. 24,000/5 hours for Product B = 4,800.