Hasselblad Company manufactures two different products, X and Y. The company has 100 pounds of materials and 300 direct labor hours available for production. The time requirements and contribution margins per unit are as follows:
What is the equation for the constraint on direct labor?
A) 2X + 3Y £ 300
B) 5X + 3Y £ 300
C) 5X + 6Y £ 100
D) 5X + 3Y £ 100

Question

Hasselblad Company manufactures two different products, X and Y. The company has 100 pounds of materials and 300 direct labor hours available for production. The time requirements and contribution margins per unit are as follows:
 What is the equation for the constraint on direct labor?
A) 2X + 3Y £ 300 
B) 5X + 3Y £ 300 
C) 5X + 6Y £ 100 
D) 5X + 3Y £ 100

Quizplus · Accepted Answer

The constraint on direct labor is given as 300 hours available for production. From the table, we know that X requires 2 hours of direct labor per unit and Y requires 3 hours of direct labor per unit. Therefore, the equation for the constraint on direct labor is 2X + 3Y ≤ 300. Option B is the correct equation for the constraint on direct labor. To determine the best choice, we need to calculate the contribution margin per unit for each product and see which combination of X and Y will give us the highest total contribution margin within the given constraints.

Hasselblad Company Manufactures Two Different Products, X and Y