Hanover Inc Hanover Desires to Have Buckets on Hand at the End

question 10

Multiple Choice

Hanover Inc. sells buckets for $15 each. Budgeted unit sales for 4 months of 2014 are: $$\begin{array} { l l } \text { March } & 26,000 \text { buckets } \\\text { April } & 28,000 \text { buckets } \\\text { May } & 22,000 \text { buckets } \\\text { June } & 25,000 \text { buckets }\end{array}$$ Hanover desires to have buckets on hand at the end of each month equal to 16 percent of the following month's budgeted unit sales. Each bucket requires 3.9 pounds of plastic. At the end of each month, Hanover desires to have 12 percent of production material needs for the next month on hand. The plastic costs $0.40 per pound. How many buckets should Hanover produce during May?

• A) 27,040 buckets
• B) 31,520 buckets
• C) 27,280 buckets
• D) None of the answer choices are correct.

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Definitions:

Marginal Utility

The additional satisfaction or utility gained by consuming an additional unit of a good or service.

Total Utility

The total satisfaction or benefit a person receives from consuming a certain quantity of goods or services.

Marginal Utility

The extra pleasure or benefit gained by a person from consuming one more unit of a product or service.

Total Utility

The total satisfaction or benefit derived by a consumer from consuming a particular quantity of goods or services.