The Mad Hatter Company owns a machine that manufactures two types of chimney caps. Production time is .20 hours for cap A and .40 hours for cap B. The machine's capacity is 2,000 hours per year. Both products are sold to a single customer who has agreed to buy all of the company's output up to a maximum of 1,000 units of cap A and 6,000 units of cap B. Selling prices and variable costs per unit are shown below. Based on this information, what is Mad Hatter's most profitable sales mix? Cap A Cap BSelling price per unit$80 $60 Variable costs per unit 53 42
A. 1,000 units of cap A and 5,000 units of cap B.
B. 5,000 units of cap B.
C. 1,000 units of cap A and 6,000 units of cap B.
D. 1,000 units of cap A and 4,500 units of cap B.
E. 10,000 units of cap A.
Answer: D
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