Decisions maximize elites net income


Elite Company has unlimited demand for either Candy Coin or Candy Bars. However, they have a limited capacity of machine hours to produce either product. Candy Coins sells for $10 per unit, has a variable cost of $6 per unit and it takes 6 minutes to produce one unit. Candy Bars sells for $15 per unit, has a variable cost of $3 per unit and it takes 10 minutes to produce one unit. Which of the following decisions would maximize Elite's net income?

a) Allocate all machine hours to the production of Candy Coins

b) Allocate all machine hours to the production of Candy Bars

c) Allocate 50% of the machine hours to Candy Coins and 50% to Candy Bars

d) Allocate 75% of the machine hours to Candy Coins and 25% to Candy Bars

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Accounting Basics: Decisions maximize elites net income
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