Use the Following Information to Answer the Question(s) Below -What Is the Total Profit Generated from the Manufacture of Manufacturing

question 44

Multiple Choice

Use the following information to answer the question(s) below.
Cerebro Manufacturing produces four types of structural support fittings-plugs, rails, rivets, and clips-which are machined on two CNC machining centers. The machining centers have a capacity of 250,000 minutes per year. The gross margin per unit and machining requirements are shown in the spreadsheet below. $\begin{array}{|l|l|l|l|l|l|l|}\hline&{\text { A }} & \text { B } & \text { C } & \text { D } & \text { E } & \text { F } \\\hline& \text { Cerebro } && & & & \\1&\text { ManufacturingModel } & & & & & \\\hline 2\\\hline 3 & \text { Product } & \text { Plugs } & \text { Rails } & \text { Rivets } & \text { Clips }& \begin{array}{l}\text { Machine } \\\text { Capacity } \\\text { (mins./year) }\end{array} \\\hline 4 & \text { Gross margin/unit } & \$ 0.40 & \$ 1.20 & \$ 0.80 & \$ 1.10 & \\\hline 5 & \text { Minutes/unit } & 1 & 2 & 3 & 1.5 & 250,000 \\\hline 6 & \text { Gross margin/minute } & \\\hline 7 & \text { Maximum production } & \\\hline 8 & \text { Profit } & \\\hline\end{array}$
-What is the total profit generated from the manufacture of rivets?

• A) $ 66,666.67
• B) $ 100,000.00
• C) $ 183,333.33
• D) $ 150,000.00

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Definitions:

Average Cost Curve

A graphical representation that shows the cost per unit of output at different levels of production.

Marginal Cost

The extra expense associated with manufacturing an additional unit of a good or service.

Cost of Capital

The rate of return that a company must earn on its investment projects to maintain its market value and attract funds, including the cost of debt and equity financing.

Market Supply

The total amount of goods or services that are available for purchase within a specific market at a given time.