Briggs Tools Makes 2 Products, Snips and Cutters

question 19

Multiple Choice

Briggs Tools makes 2 products, snips and cutters.Snips have a contribution margin per unit of $8.00 and cutters have a contribution margin per unit of $12.00.Briggs has annual fixed costs of $117,600.Briggs' historical sales data indicates that snips and cutters are sold in a 2 to 1 sale mix.Each snip takes 2 machine hours and each cutter takes 4 machine hours.Demand for both products is unlimited but the company must produce at least 1,000 units of each to stay competitive.Briggs is limited to 24,000 machine hours per month.How many units of each product should be produced each month?

• A)20,000 snips, 1,000 cutters
• B)10,000 snips, 4,000 cutters
• C)12,000 snips, 6,000 cutters
• D)10,000 snips, 1,000 cutters

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Definitions:

Bank

A financial institution licensed to receive deposits, offer loans, and provide other financial services, such as currency exchange.

Note Receivable

A financial asset representing a borrower's promise to pay the holder a specific sum of money either on demand or at a future specified date.

Bank Reconciliation

The process of matching and comparing figures from the accounting records against those shown on a bank statement to ensure they are in agreement.

Book Balance

The balance of an account according to the accounting records, before any adjustments or reconciliations have been made.