The Mad Hatter Company owns a machine that manufactures two types of chimney caps.Production time is .20 hours for cap A and .40 hours for cap B.The machine's capacity is 2,000 hours per year.Both products are sold to a single customer who has agreed to buy all of the company's output up to a maximum of 1,000 units of cap A and 6,000 units of cap B.Selling prices and variable costs per unit are shown below.Based on this information,what is Mad Hatter's most profitable sales mix?
A) 10,000 units of cap A.
B) 5,000 units of cap B.
C) 1,000 units of cap A and 5,000 units of cap B.
D) 1,000 units of cap A and 6,000 units of cap B.
E) 1,000 units of cap A and 4,500 units of cap B.
Correct Answer:
Verified
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