An accounting firm has 780 hours of staff time and 272 hours of reviewing time available each week.The firm charges $1000 for an audit and $350 for a tax return.Each audit requires 60 hours of staff time and 16 hours of review time.Each tax return requires 10 hours of staff time and 4 hours of review time.What numbers of audits and tax returns will yield an optimal revenue? What is the optimal revenue?
A)0 audits 13 tax returns
Optimal revenue: $16,800
B)48 audits 5 tax returns
Optimal revenue: $21,800
C)0 audits 65 tax returns
Optimal revenue: $10,000
D)5 audits 48 tax returns
Optimal revenue: $21,800
E)10 audits 10 tax returns
Optimal revenue: $11,750

Question

An accounting firm has 780 hours of staff time and 272 hours of reviewing time available each week.The firm charges $1000 for an audit and $350 for a tax return.Each audit requires 60 hours of staff time and 16 hours of review time.Each tax return requires 10 hours of staff time and 4 hours of review time.What numbers of audits and tax returns will yield an optimal revenue? What is the optimal revenue? ​
A)0 audits 13 tax returns
Optimal revenue: $16,800
B)48 audits 5 tax returns
Optimal revenue: $21,800
C)0 audits 65 tax returns
Optimal revenue: $10,000
D)5 audits 48 tax returns
Optimal revenue: $21,800
E)10 audits 10 tax returns
Optimal revenue: $11,750

Quizplus · Accepted Answer

The optimal solution maximizes revenue given the constraints on staff and review hours. By setting up and solving the linear programming problem, option D provides the highest revenue within the constraints.

An Accounting Firm Has 780 Hours of Staff Time and 272