Nolan Industries Manufactures Water Filters/purifiers That Attach to a Kitchen

question 23

Multiple Choice

Nolan Industries manufactures water filters/purifiers that attach to a kitchen faucet. Each purifier consists of a housing unit that attaches to the faucet and a 60-day filter that is inserted into the housing. Past records indicate that on average the number of filters produced plus the number of housing units produced should be at least 500 per week. It takes 20 minutes to make and assemble each filter and 40 minutes for each housing. The manufacturing facility has up to 20,000 minutes per week for making and assembling these units, but due to certain parts' supply constraints, the number of housing units per week can be at most 400. If manufacturing costs (for material and labor) are $7.25 for each filter and $8.55 for each housing unit, how many of each should be produced to minimize weekly costs? Find the minimum cost. ​

• A)Minimum cost of $3,206.25 weekly when no filtres and 375 housing units are produced.
• B)Minimum cost of $3,587.50 weekly when 200 filtres and 250 housing units are produced.
• C)Minimum cost of $2,978.75 weekly when 175 filtres and 200 housing units are produced.
• D)Minimum cost of $3,160.00 weekly when 200 filtres and 200 housing units are produced.
• E)Minimum cost of $3,625.00 weekly when 500 filtres and no housing units are produced.

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Definitions:

Adjusting Entries

Journal entries made at the end of an accounting period to update accounts for accruals and deferrals not yet recorded through daily transactions.

Closing Entries

Entries made at the end of an accounting period to transfer the balances of temporary accounts to a permanent owner’s equity account, Owner’s Capital.

Correcting Entries

Entries to correct errors made in recording transactions.

Salary Allowance

A predetermined amount paid to employees, which may be part of their salary package, often for specific purposes or expenses.