An auditee produces two product lines: Zebo and Zabo. Zebo takes one hour to produce at a cost of $7 per unit and can be sold for $20 per unit. Zabo takes one-half hour to produce at a cost of $15 per unit and retails for $22 per unit. Only 10,000 units of Zebo can be sold on the market because of stiff competition. Production facilities can provide 8,000 total hours.

Required:

a. Formalize this linear programming problem to evaluate the auditee’s production plans.

b. Use the graphical approach to solve the problem.