Figure 25-7
the Following Information Is Available for the Johnson

question 8

Multiple Choice

Figure 25-7
The following information is available for the Johnson Boat Company, which sells two products: $\begin{array}{lcc}&\text { 3- Person Raft } & \text { Kayak } \\&\text { (Variable } A \text { ) } & \text { (Variable B) }\\\text { Selling price } & £ 50 & £ 80 \\\text { Variable costs } & £ 35 & £ 50 \\\text { Fixed costs (average) } & £ 10 & £ 20 \\\text { Processing time } & 2 \text { hours } & 4 \text { hours } \\\text { Vinyl cover used } & 16 \mathrm{sq} . \mathrm{ft} . & 12 \mathrm{sq} . \mathrm{ft} .\end{array}$
There are 100 hours available in the plant and 75 square metres of vinyl available per operating period.
-Refer to Figure 25-7. The constraint equation representing the materials available for the production processes is:

• A)2A + 4B > 100.
• B)16A + 12B = 75.
• C)2A + 4B = 200.
• D)16A + 12B < 75.

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Definitions:

Periodic Inventory System

An inventory accounting system where the inventory level is updated and the cost of goods sold is calculated at the end of a period, rather than after each sale.

Purchases Account

An account used in accounting to record the total cost of goods bought for resale during an accounting period.

Freight In

The cost of transporting goods into a business, usually included in the cost of inventory.