A company sells two products with information as follows: Sales price per unit Variable cost per unit A $11 $10 B $28 $10 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 3,000 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?

Principles of Accounting Volume 2
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ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax
Chapter10: Short-term Decision Making
Section: Chapter Questions
Problem 14MC: A company produces two products. E and F in batches of 100 units. The production and cost data are:...
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A company sells two products with information
as follows:
Sales price per unit
Variable cost per unit
A
$11
$10
B
$28
$10
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 3,000 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?
Transcribed Image Text:A company sells two products with information as follows: Sales price per unit Variable cost per unit A $11 $10 B $28 $10 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 3,000 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?
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