A company’s productive capacity is limited to 480,000 machine hours. Product X requires 10 machine hours to produce; Product Y requires 2 machine hours to produce. Product X sells for $32 per unit and has variable costs of $12 per unit; Product Y sells for $24 per unit and has variable costs of $10 per unit. Assuming that the company can sell as many of either product as it produces, it should a. Produce X and Y in the ratio of 57% X and 43% Y. b. Produce X and Y in the ratio of 83% X and 17% Y. c. Produce equal amounts of Product X and Product Y. d. Produce only Product X. e. Produce only Product Y.
A company’s productive capacity is limited to 480,000 machine hours. Product X requires 10 machine hours to produce; Product Y requires 2 machine hours to produce. Product X sells for $32 per unit and has variable costs of $12 per unit; Product Y sells for $24 per unit and has variable costs of $10 per unit. Assuming that the company can sell as many of either product as it produces, it should a. Produce X and Y in the ratio of 57% X and 43% Y. b. Produce X and Y in the ratio of 83% X and 17% Y. c. Produce equal amounts of Product X and Product Y. d. Produce only Product X. e. Produce only Product Y.
Chapter2: Building Blocks Of Managerial Accounting
Section: Chapter Questions
Problem 5EA: Rose Company has a relevant range of production between 10,000 and 25.000 units. The following cost...
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A company’s productive capacity is limited to 480,000 machine
hours. Product X requires 10 machine hours to produce;
Product Y requires 2 machine hours to produce.
Product X sells for $32 per unit and has variable costs of
$12 per unit; Product Y sells for $24 per unit and has variable
costs of $10 per unit. Assuming that the company can
sell as many of either product as it produces, it should
a. Produce X and Y in the ratio of 57% X and 43% Y.
b. Produce X and Y in the ratio of 83% X and 17% Y.
c. Produce equal amounts of Product X and Product Y.
d. Produce only Product X.
e. Produce only Product Y.
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