The following information is available for Wilson Trailer Company, which sells two products:
$\begin{array}{lcc}
&\text { Trailer A } &\text { Trailer B} \
\text { Processing time } & 2 \text { hours } & 4 \text { hours } \
\text { Vinyl cover used } & 16 \mathrm{sq} \cdot \mathrm{m} . & 12 \mathrm{sq} . \mathrm{m} . \
\text { Selling price } & \$ 50.00 & \$ 80.00 \
\text { Variable cost } & \$ 35.00 & \$ 50.00 \
\text { Fixerl cost } & \$ 10.00 & \$ 20.00
\end{array}$ There are 100 hours available in the plant and 75 square metres of vinyl available per operating period.
-Refer to the figure.What is the objective function for maximizing profits?
A)Maximize $15A + $30B
B)Minimize $15A + $30B
C)Maximize $35A + $50B
D)Maximize $50A + $80B

Question

Quizplus · Accepted Answer

The objective function for maximizing profits is to maximize the contribution margin per product, which is the selling price minus the variable cost. For Trailer A, the profit per unit is $50 - $35 = $15. For Trailer B, it is $80 - $50 = $30. Therefore, the objective function is to maximize $15A + $30B.

The Following Information Is Available for Wilson Trailer Company, Which