Question
company has 100,000 hours of capacity and manufactures two products, Product X and Product Z. Neither product has enough demand to utilize the entire capacity,
company has 100,000 hours of capacity and manufactures two products, Product X and Product Z.
Neither product has enough demand to utilize the entire capacity, but the combined demand of both
products exceeds the capacity of the plant. It takes one hour to make one unit of Product X and two hours
to make one unit of Product Z. The following information is available:
Product X
Product Z
Units produced from capacity available
100,000
50,000
Contribution margin per unit
$20
$30
What product or products should be made?
A) only make Product X
B) only make Product Z
C) make Product X to meet customer demand and then make Product Z
D) make Product Z to meet customer demand and then make Product X
Answer:
C
Why answer c not a ?
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Intermediate Accounting
Authors: James D. Stice, Earl K. Stice, Fred Skousen
16th Edition
324376375, 0324375743I, 978-0324376371, 9780324375749, 978-0324312140
