Question
83. Avocado Ltd produces small electronic components for kitchen appliances. Two of its products are Component Y and Component Z. The selling price of Component
83.Avocado Ltd produces small electronic components for kitchen appliances. Two of its products are Component Y and Component Z. The selling price of Component Y is $15, and the selling price of Component Z is $20. The variable cost per unit for Component Y is $8 and the variable cost per unit of Component Z is $11. The machine hour requirement and demand for the two products are:
component y component z
monthly demand 1000 2500
machine hours required per unit 2 hours 3 hours
Avocado Ltd's production capacity is 6500 machine hours per month. The optimal product mix is:
A.1000 units X, 1500 units Y.(why this option)
B.0 units X, 2167 units Y.
C.1000 units X, 2500 units Y.
D.1500 units X, 1000 units Y.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started