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A Company Can Sell Any Mix of Product a and Product

Question 73

Multiple Choice

A company can sell any mix of Product A and Product B at full capacity.The company has 100,000 hours of capacity.The demand for each product exceeds the capacity.It takes one hour to make one unit of Product A and two hours to make one unit of Product B.The following information is available:
 Product A  Product B  Units produced from capacity available 100,00050,000 Contribution margin per unit $20$30\begin{array}{ll}&\text { Product A }&\text { Product B }\\\text { Units produced from capacity available }&100,000 & 50,000 \\\text { Contribution margin per unit }&\$ 20 & \$ 30\end{array}
If capacity is the limiting factor,which product should be produced?


A) 0 units of Product A and 50,000 units of Product B
B) 20,000 units of Product A and 30,000 units of Product B
C) 30,000 units of Product A and 20,000 units of Product B
D) 100,000 units of Product A and 0 units of Product B

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