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The Epsilon Company produces four products - A, B, C and D. It is estimated that 1000 units of each of these products can be sold in June 2019 at the following selling prices, £90, £100, £120 and £90, respectively. The total ?xed costs for June 2019 are expected to be £50,000. The following are the product costs and the amount of ?xed cost which is included:
Product
A B C D
Product cost per unit £36 £48 £60 £46
Fixed costs £6 £8 £10 £6
The company's machine capacity is limited to 5,500 hours per month. Each unit of products A, B, C, and D require 2, 3, 5 and 2 machine hours respectively.
Question 1: The maximum pro?t which can be earned in June is:
A £73,000
B £1 15,000
C £120,000
D None of the above
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