Watson Corporation Manufactures Two Products,Simple and Complex

Multiple Choice

Watson Corporation manufactures two products,Simple and Complex.The following annual information was gathered: Total annual fixed costs are $18,000.Assume Watson Corporation can produce and sell any mix of Simple or Complex at full capacity.It takes one hour to make one unit of Complex.However,Simple takes 50% longer to manufacture when compared to Complex.Only 120,000 hours of plant capacity are available.How many units of Simple and Complex should Watson Corporation produce and sell in a year to maximize profits?

A) an equal number of Simple and Complex
B) 80,000 units of Simple and 0 units of Complex
C) 0 units of Simple and 120,000 units of Complex
D) either Simple or Complex; it does not matter