Accounting 9706 · AS & A Level · Costs and cost behaviour

Costs and cost behaviour — practice question

The information about two products produced by a company is shown below. Product X: selling price per unit $= 13$, variable cost per unit $= 11$. Product Y: selling price per unit $= 8$, variable cost per unit $= 4$. The company can sell at most $11000$ units of X and $9000$ units of Y. However, because of production limits, it cannot make more than $10000$ units of X and Y in total. Which production combination will maximise profits?

  • AUnits of X: $10000$, Units of Y: $0$
  • BUnits of X: $1000$, Units of Y: $9000$
  • CUnits of X: $9000$, Units of Y: $1000$
  • DUnits of X: $5000$, Units of Y: $5000$

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