The Logistics/operations Manager of a Mail Order House Purchases Two

question 22

Multiple Choice

The logistics/operations manager of a mail order house purchases two products for resale: King Beds (K) and Queen Beds (Q) .Each King Bed costs $500 and requires 100 cubic feet of storage space,and each Queen Bed costs $300 and requires 90 cubic feet of storage space.The manager has $75,000 to invest in beds this week,and her warehouse has 18,000 cubic feet available for storage.Profit for each King Bed is $300,and for each Queen Bed is $150.Which of the following is not a feasible purchase combination?

• A)0 King Beds and 0 Queen Beds
• B)0 King Beds and 250 Queen Beds
• C)150 King Beds and 0 Queen Beds
• D)90 King Beds and 100 Queen Beds
• E)0 King Beds and 200 Queen Beds

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Definitions:

Measurement Alternative

A choice given to companies under accounting principles to measure certain assets or liabilities at cost or at fair value, depending on which reflects the substance of the transaction better.

FASB

The Financial Accounting Standards Board (FASB) is an independent organization that establishes accounting and financial reporting standards for companies and non-profit organizations in the United States.

Balance Sheet Element

Components of a balance sheet which typically include assets, liabilities, and shareholders' equity.

GAAP

Generally Accepted Accounting Principles, which are a common set of accounting rules and standards used in the United States.