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Zeke Co. manufactures two products that both require labor and machining.There is unlimited demand for these products. Unit sales and cost data and processing requirements

Zeke Co. manufactures two products that both require labor and machining.There is unlimited demand for these products.

Unit sales and cost data and processing requirements follow:

Product A Product B

Selling Price $75 $200

Variable costs $25 $80

Machine hours required 0.4 1.2

Labor hours required 2 6

The company is limited to 160,000 machine hours and 120,000 labor hours. Fixed costs are $1,000,000

What is the most profitable mix of products to produce? Explain your answer

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