a firm has the facilities for manufacturing two commodities A and B. the unit variable cost is $125 for A and $135 for B. the selling price is $209 for A and $225 for B. the capital available for the production of this commodity exclusive of that required to cover fixed cost is $65000 per month. the firm will produce only as many unit of each commodity as can readily be sold and it is essential that maximum monthly sales will be 290 unit of A and 450 unit of B. during its manufacture each unites must pass through three production department; the following table presents the relevant information pertaining to these departments. what monthly production each commodity will yields the maximum profit from this operation?
a firm has the facilities for manufacturing two commodities A and B. the unit variable cost is $125 for A and $135 for B. the selling price is $209 for A and $225 for B. the capital available for the production of this commodity exclusive of that required to cover fixed cost is $65000 per month. the firm will produce only as many unit of each commodity as can readily be sold and it is essential that maximum monthly sales will be 290 unit of A and 450 unit of B. during its manufacture each unites must pass through three production department; the following table presents the relevant information pertaining to these departments. what monthly production each commodity will yields the maximum profit from this operation?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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- a firm has the facilities for manufacturing two commodities A and B. the unit variable cost is $125 for A and $135 for B. the selling price is $209 for A and $225 for B. the capital available for the production of this commodity exclusive of that required to cover fixed cost is $65000 per month. the firm will produce only as many unit of each commodity as can readily be sold and it is essential that maximum monthly sales will be 290 unit of A and 450 unit of B. during its manufacture each unites must pass through three production department; the following table presents the relevant information pertaining to these departments. what monthly production each commodity will yields the maximum profit from this operation?
number of machine hours
required per unit
commodity number of machine hours available per
month
production A B
department
D1 2.0 1.7 734
D2 1.4 2.6 824
D3 0.3 2.0 550
what is the maximum profit as calculated before deducing fixed cost?
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