How many of each product should be produced per month using the short-run profit maximizing strategy?

ACCOUNTING

Multiple Choice

Raines Company manufactures three sizes of kitchen appliances: small, medium, and large. Product information is provided below.

Small Medium Large

Unit selling price $150 $250 $500

Unit costs:

Variable manufacturing (60) (120) (200)

Fixed manufacturing (40) (50) (120)

Variable selling and administrative (30) (30) (30)

Unit profit $ 20 $ 50 $150



Demand in units 100 120 100

Machine-hours per unit 20 40 100



The maximum machine-hours available are 6,000 per week.



How many of each product should be produced per month using the short-run profit maximizing strategy?



Small Medium Large

a. 0 120 12

b. 100 0 40

c. 100 100 0

d. 100 20 40


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