What is the most profitable mix of Blue and Red for this company?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Short Term Decision Making On Your Own #3 Solution
Color Inc. can sell as many units of its two products, Blue and Red, as it can produce, but it
has limited resources. It can produce 2 units of Blue per hour or 3 units of Red per hour.
Color Inc. only has 1,000 production hours per month available. Selling price of Blue is $10;
selling price of Red is $9. Variable costs for Blue and Red are $6 each.
What is the most profitable mix of Blue and Red for this company?
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