Montgomery Company produces A and B with contribution margins per unit of $40 and $30, respectively. Only 500 labor hours and 300 machine hours are available for production. Time requirements to produce one unit of A and B are as follows: $\begin{array}{lcc}
& \text { Product A } & \text { Product B } \
\text { Labor hours per unit } & 6 & 3 \
\text { Machine hours per unit } & 2 & 5
\end{array}$
What is the objective function to maximize profits for Montgomery Company?
A)Minimize 6A + 3B
B)Maximize 2A + 5B
C)Minimize 40A + 30B
D)Maximize 40A + 30B

Question

Montgomery Company produces A and B with contribution margins per unit of $40 and $30, respectively. Only 500 labor hours and 300 machine hours are available for production. Time requirements to produce one unit of A and B are as follows: $\begin{array}{lcc} 
& \text { Product A } & \text { Product B } \
\text { Labor hours per unit } & 6 & 3 \
\text { Machine hours per unit } & 2 & 5
\end{array}$
What is the objective function to maximize profits for Montgomery Company?
A)Minimize 6A + 3B
B)Maximize 2A + 5B
C)Minimize 40A + 30B
D)Maximize 40A + 30B

Quizplus · Accepted Answer

The objective function to maximize profits involves maximizing the total contribution margin, which is $40 per unit for Product A and $30 per unit for Product B. Thus, the objective function is to maximize the total contribution margin, represented as 40A + 30B.

Montgomery Company Produces a and B with Contribution Margins Per