Product a requires 5 machine hours per unit to be produced, product b requires only 3 machine hours per unit, and the company's productive capacity is limited to 240,000 machine hours. product a sells for $16 per unit and has variable costs of $6 per unit. product b sells for $12 per unit and has variable costs of $5 per unit. assuming the company can sell as many units of either product as it produces, the company should:

Question

Business

Guest

7 July, 05:25

Product a requires 5 machine hours per unit to be produced, product b requires only 3 machine hours per unit, and the company's productive capacity is limited to 240,000 machine hours. product a sells for $16 per unit and has variable costs of $6 per unit. product b sells for $12 per unit and has variable costs of $5 per unit. assuming the company can sell as many units of either product as it produces, the company should:

+2

Answers (1)

Know the Answer?

Eduardo Garner · Answer 1

If we let x be the number of machine hours that should be spent for the production of A, the machine hours left for product b is equal to 240,000 - x. Since the difference between the unit price and the cost per unit of A is greater compared to B, it should be noted that the company should maximize the production of A rather than B.