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Question: Rope Co. makes two products, both of which use a scarce resource: direct labour hours. Both produ...

Rope Co. makes two products, both of which use a scarce resource: direct labour hours. Both products have a unit contribution margin of $20, and there is sufficient demand for both products that Rope can sell all of the products it can produce. However, the direct labour cost per unit of Product Y is higher than that for Product X. The unit price of Product X is higher than the unit price of Product Y. Rope is interested in maximizing its profits. Which of the following statements is correct?

a) Rope should produce both products, but more Y than X.

b) Rope should only produce Y.

c) Rope should produce both products, but more X than Y.

d) Rope should only produce X