Required Question: If Auto Company wants to maintain product mix in the budget, and given the machine minutes constraint and the sales constraint for Trucks and Cars, what is the maximum number of units of each prodcut that the company should sell and what would be the expected total income? Auto Company produces two products, Trucks and Cars. The following table providesinformation about the two products and budget sales for the upcoming year. Auto Companykeeps no finished inventory, so production equals sales.Maximum Unit SalesPlanned Unit SalesPrice Per UnitVariable Cost perUniteFixed CostsMachine Capacity(Minutes)Trucks160,000140,000$25.00$15.00Machine Minutes per 9UnitCars130,000110,000$40.00$25.0014Total290,000250,000$2,000,0003,000,000

Variable costs are those costs which changes with change in level of costs. Fixed costs do not…

Required Question: If Auto Company wants to maintain product mix in the budget, and given the machine minutes constraint and the sales constraint for Trucks and Cars, what is the maximum number of units of each prodcut that the company should sell and what would be the expected total income?

Required Question: If Auto Company wants to maintain product mix in the budget, and given the machine minutes constraint and the sales constraint for Trucks and Cars, what is the maximum number of units of each prodcut that the company should sell and what would be the expected total income?

Principles of Accounting Volume 2

19th Edition

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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Question

Auto Company produces two products, Trucks and Cars. The following table provides
information about the two products and budget sales for the upcoming year. Auto Company
keeps no finished inventory, so production equals sales.
Maximum Unit Sales
Planned Unit Sales
Price Per Unit
Variable Cost per
Unite
Fixed Costs
Machine Capacity
(Minutes)
Trucks
160,000
140,000
$25.00
$15.00
Machine Minutes per 9
Unit
Cars
130,000
110,000
$40.00
$25.00
14
Total
290,000
250,000
$2,000,000
3,000,000

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