Avocado Ltd Produces Small Electronic Components for Kitchen Appliances

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:
Both Component Y and Component X have to undergo the machining process first, followed by a manual polishing labour process. Avocado Ltd's capacity is 6500 machine hours and 6500 labour hours. The top priority of Avocado Ltd in terms of managing constraints is to:

A) increase advertising to stimulate greater demand for Component Z.
B) train employees to improve productivity in relation to polishing.
C) invest in additional machines.
D) lower the price of Component Y to simulate demand.

Correct Answer:

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