Jov Co sells three products: A, B and C. It can either make the products itself or purchase them from a subcontractor.The following information is available:Machine hours to manufactureProductABCO 0O 2,500532O 4,500Variable cost($)302015For the coming period, Jov Co has received orders from its customers for 5,000 units of each product but it only has 20,000 machine hours available.What is the optimum number of units of product B which Jov Co should purchase from the subcontractor?O 5,000Purchase cost from subcontractor($)403520

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What is the optimum number of units of product B which Jov Co should purchase from the subcontractor? 5,000 D0 2,500 4,500

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Question

Jov Co sells three products: A, B and C. It can either make the products itself or purchase them from a subcontractor.
The following information is available:
Machine hours to manufacture
Product
A
B
C
O 0
O 2,500
5
3
2
O 4,500
Variable cost
($)
30
20
15
For the coming period, Jov Co has received orders from its customers for 5,000 units of each product but it only has 20,000 machine hours available.
What is the optimum number of units of product B which Jov Co should purchase from the subcontractor?
O 5,000
Purchase cost from subcontractor
($)
40
35
20

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