Tyke, Inc. produces two products, A and B, each requiring direct material and labour. Total labour available is 200 hours, and 300 kilograms of material. Each unit of A sells for $10, and B sells for $15. Given the following linear programming information: $$\begin{array} { l l }
\text { Maximize: } & \$ 4 \mathrm {~A} + \$ 5 \mathrm { Y } \
\text { Subject to: } & 3 \mathrm {~A} + 1 \mathrm {~B} = 200 \
& 2 \mathrm {~A} + 2 \mathrm {~B} = 300
\end{array}$$ What are the variable costs per unit for A and B?
A) $4 and $15
B) $14 and $19
C) $6 and $10
D) $7 and $14

Question

Tyke, Inc. produces two products, A and B, each requiring direct material and labour. Total labour available is 200 hours, and 300 kilograms of material. Each unit of A sells for $10, and B sells for $15. Given the following linear programming information: $$\begin{array} { l l } 
\text { Maximize: } & \$ 4 \mathrm {~A} + \$ 5 \mathrm { Y } \
\text { Subject to: } & 3 \mathrm {~A} + 1 \mathrm {~B} = 200 \
& 2 \mathrm {~A} + 2 \mathrm {~B} = 300
\end{array}$$ What are the variable costs per unit for A and B?
A) $4 and $15
B) $14 and $19
C) $6 and $10
D) $7 and $14

Quizplus · Accepted Answer

The variable costs per unit for A and B are calculated by subtracting the contribution margin (given by the maximize equation: $4A + $5B) from the selling price of each product. However, the given information does not directly provide the variable costs but rather the contribution margin per unit. The correct variable costs cannot be accurately determined from the provided information, leading to a misunderstanding in the question's setup. The choices given do not align with the calculation method for variable costs from the provided data.

Tyke, Inc Produces Two Products, a and B, Each Requiring Direct