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?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Question
  1. 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?

Expert Solution
steps

Step by step

Solved in 3 steps

Blurred answer
Knowledge Booster
Cost Sheet
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education