Computer Products produces two keyboards, Regular and Special

ACCOUNTING

Multiple Choice

Computer Products produces two keyboards, Regular and Special. Regular keyboards have a unit contribu tion margin of $128, and Special keyboards have a unit contribution margin of $720. The demand for Regulars exceeds Computer Product’s production capacity, which is limited by available machine-hours and direct manufacturing labor-hours. The maximum demand for Special keyboards is 80 per month. Management desires a product mix that will maximize the contri bution toward fixed costs and profits.



Direct manufacturing labor is limited to 1,600 hours a month and machine-hours are limited to 1,200 a month. The Regular keyboards require 20 hours of labor and 8 machine-hours. Special keyboards require 34 labor-hours and 20 machine-hours.



Let R represent Regular keyboards and S represent Special keyboards. The correct set of equations for the keyboard production process is



a. Maximize: $128R + $720S

Constraints:

Labor-hours: 20R + 34S £ 1,600

Machine-hours: 8R + 20S £ 1,200

Special: S £ 80

S ³ 0

Regular: R ³ 0



b. Maximize: $128R + $720S

Constraints:

Labor-hours: 20R + 34S ³ 1,600

Machine-hours: 8R + 20S ³£ 1,200

Special: S ³ 80

S ³ 0

Regular: R ³ 0



c. Maximize: $720S + $128R

Constraints:

Labor-hours: 20R + 8S £ 1,600

Machine-hours: 34R + 20S £ 1,200

Special: S £ 80

S ³ 0

Regular: R ³ 0



d. Maximize: $128R + $720S

Constraints:

Labor-hours: 20R + 34S £ 1,600

Machine-hours: 8R + 20S £ 1,200

Special: S ³ 80

S £ 0

Regular: R £ 0

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