Knoxville Manufacturing Company produces X and Y with contribution margins per unit of $10 and $90, respectively. Only 200 labor hours and 400 machine hours are available for production. Time requirements to produce one unit of X and Y are as follows:
What is the constraint on labor hours for Knoxville Manufacturing Company?
A) 1X + 2Y £ 200
B) 10X + 90Y £ 200
C) 1X + 2Y £ 400
D) 1X + 4Y £ 400

Question

Knoxville Manufacturing Company produces X and Y with contribution margins per unit of $10 and $90, respectively. Only 200 labor hours and 400 machine hours are available for production. Time requirements to produce one unit of X and Y are as follows:
 What is the constraint on labor hours for Knoxville Manufacturing Company?
A) 1X + 2Y £ 200 
B) 10X + 90Y £ 200 
C) 1X + 2Y £ 400 
D) 1X + 4Y £ 400

Quizplus · Accepted Answer

Labor hours is the constraint, and it is limited to 200 hours. The time requirement to produce one unit of X is 1 labor hour, and Y is 2 labor hours. Therefore, the constraint can be represented as 1X + 2Y ≤ 200.

Knoxville Manufacturing Company Produces X and Y with Contribution Margins