Pillsbury Corporation makes two types of ice cream: Chocolate and Peanut Butter. Operating information from the previous year follows: Fixed costs of $30,000 per year are presently allocated equally between both products. If the product mix were to change, total fixed costs would remain the same. Assuming there is unlimited demand for both products and Pillsbury has 20,000 machine hours available, how many units of each product should be produced and sold respectively?
A) 0, 0.
B) 0, 40,000.
C) 6,000, 20,000.
D) 6,000, 40,000.
E) 20,000, 0.
Correct Answer:
Verified
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