2. A beer manufacturer owns a bottling machine that can be run 20 hours per day (4 hours are required for daily maintenance). The plant can produce 10,000 cans of beer per hour. This machine can be used to bottle regular or light beer, but not both at the same time. The profit of light beer is $0.04 per can and the profit of regular beer is $0.05 per can. If the firm uses the machine for the entire 20 hours to bottle light beer to meet customer orders, it cannot bottle any regular beer. What is the opportunity cost of producing light beer?

2. A beer manufacturer owns a bottling machine that can be run 20 hours per day (4 hours are required for daily maintenance). The plant can produce 10,000 cans of beer per hour. This machine can be used to bottle regular or light beer, but not both at the same time. The profit of light beer is $0.04 per can and the profit of regular beer is $0.05 per can. If the firm uses the machine for the entire 20 hours to bottle light beer to meet customer orders, it cannot bottle any regular beer. What is the opportunity cost of producing light beer?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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