10. Pete's Sports Products makes caps and uniforms. It can sell all of either product it can make. The relevant data for these two products follows:

Caps

Uniforms

Machine time per unit

0.5 Hour

2 Hours

Selling price per unit

$10

$20

Variable costs per unit

$ 2

$ 4

The company has 100,000 machine hours available for production. The company should select which product to maximize operating profits? (20 points) (Production is limited by machine hours)

a.

Uniforms, because its contribution margin per unit is $16.

b.

Uniforms, because its contribution margin per hour is $8.

c.

Caps, because its contribution margin per hour is $16

d.

Caps, because its contribution margin per unit is $8.