Use the following data for next 2 questions:
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 profits is calculated by subtracting the variable costs from the selling price for each product. For product T, the profit is $22 - $20 = $2, and for product S, it is $16 - $15 = $1. Therefore, the objective function is MAX $2T + $1S.

Use the Following Data for Next 2 Questions