Question: 83. Avocado Ltd produces small electronic components for kitchen appliances. Two of its products are Component Y and Component Z. The selling price of Component

83.Avocado Ltd produces small electronic components for kitchen appliances. Two of its products are Component Y and Component Z. The selling price of Component Y is $15, and the selling price of Component Z is $20. The variable cost per unit for Component Y is $8 and the variable cost per unit of Component Z is $11. The machine hour requirement and demand for the two products are:

Component Y Component z

monthly demand 1000 2500

machine hour required per unit 2 hours 3 hours

Avocado Ltd's production capacity is 6500 machine hours per month. The optimal product mix is:

A.1000 units X, 1500 units Y. (why explain )

B.0 units X, 2167 units Y.

C.1000 units X, 2500 units Y.

D.1500 units X, 1000 units Y.

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