Hasselblad Company manufactures two different products, X and Y. The company has 100 pounds of materials and 300 direct labor hours available for production. The time requirements and contribution margins per unit are as follows:
What is the objective function for maximizing profits?
A) Minimize $5X + $6Y
B) Maximize $2X + $3Y
C) Maximize $5X + $6Y
D) Maximize $5X + $3Y

Question

Hasselblad Company manufactures two different products, X and Y. The company has 100 pounds of materials and 300 direct labor hours available for production. The time requirements and contribution margins per unit are as follows:
 What is the objective function for maximizing profits?
A) Minimize $5X + $6Y 
B) Maximize $2X + $3Y 
C) Maximize $5X + $6Y 
D) Maximize $5X + $3Y

Quizplus · Accepted Answer

The objective function for maximizing profits is the contribution margin per unit multiplied by the number of units produced, summed across both products. Therefore, the objective function is: $5X + $6Y. Choice C correctly represents this objective function.

Hasselblad Company Manufactures Two Different Products, X and Y