Answer to Question #211339 in Economics of Enterprise for Abel

Question

1. a firm has the facilities for manufacturing two commodities A and B. the unit variable cost is $125 for A and $135 for B. the selling price is $209 for A and $225 for B. the capital available for the production of this commodity exclusive of that required to cover fixed cost is $65000 per month. the firm will produce only as many unit of each commodity as can readily be sold and it is essential that maximum monthly sales will be 290 unit of A and 450 unit of B. during its manufacture each unites must pass through three production department; the following table presents the relevant information pertaining to these departments. what monthly production each commodity will yields the maximum profit from this operation?

number of machine hours

required per unit

commodity number of machine hours available per

month

production A B

department

D1 2.0 1.7 734

D2 1.4 2.6 824

D3 0.3 2.0 550

what is the maximum profit as calculated before deducing fixed cost?

Answer 1

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