Tieton Co. has two departments: Fabrication and Assembly. They produce 2 products. Product T needs 6 hours in fabrication and 6 hours in assembly. Product S needs 2 hours in fabrication and 4 hours in assembly. Fabrication has 24 hours available and Assembly 18. Total variable costs are $20 and $15 for T and S respectively. T sells for $22 and S for $16.
The objective function to maximize Tieton's profits is:
A) MAX$22T+ $16S
B) MAX$20T+ $15S
C) MAX$1T + $2S
D) MAX$2T + $1S

Question

Quizplus · Accepted Answer

The objective function to maximize profit is the difference between selling price and variable cost for each product, which is $2 for T ($22 - $20) and $1 for S ($16 - $15).

Tieton Co Has Two Departments: Fabrication and Assembly