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:

Risk-loving

A preference or inclination to undertake investment with uncertain outcomes, often with the potential for significant gains.

Utility

A measure of satisfaction, usefulness, or value that a consumer derives from consuming a good or service.

Decreasing Rate

A situation or condition in which the rate at which something occurs or is processed diminishes over time.

Expected Utility

A theory in economics that calculates the utility expected from different choices, aiming to predict an individual's preferences under uncertainty.