Consider the Spreadsheet for Stone Age Surfboards Provided Below -What Is the Shadow Price for the Finishing Hours Used

question 11

Multiple Choice

Consider the spreadsheet for Stone Age Surfboards provided below. Use this data to answer the following questions) , using the Standard Solver.
Stone Age Surfboards is a small manufacturer of two types of popular low-tide surfboards, the Graystone and the Lava models. The manufacturing process consists of two departments: fabrication and finishing. The fabrication department has 8 skilled workers, each of whom works
9.25 hours per day. The finishing department has 5 workers, each of whom works a 6-hour shift per day. Each pair of Graystone surfboards requires 2.5 labor hours in the fabrication department and 2 labor hours in finishing. The Lava model requires 4.2 labor-hours in fabrication and 3.6 labor-hours in finishing. The company operates 6 days a week. It makes a per unit profit of $40 on the Graystone model and $60 on the Lava model. The company anticipates selling at least twice as many Lava models as Graystone models. $\begin{array}{|l|c|c|c|c|} \hline & \text { A } & \text { B } & \text { C } & \text { D } \\\hline 1 & \text { Stone Age Surfboards } & & & \\\hline 2 & & & & \\\hline 3 & \text { Data } & & & \\\hline 4 & &{\text { Product }} & \\\hline 5 & \text { Department } & \text { Graystone } & \text { Lava } & \text { Limitation hours) } \\\hline 6 & \text { Fabrication } & 2.5 & 4.2 & 74 \\\hline 7 & \text { Finishing } & 2 & 3.6 & 30 \\\hline 8\\\hline 9 & \text { Profit/Unit } & \$ 40.00 & \$ 60.00 \\\hline 10 & & & \\\hline 11 & & & \\\hline 12 & \text { Model } & & \\\hline 13 & & \text { Graystone } & \text { Lava } \\\hline 14 & \text { Quantity Produced } & & & \text { Hours Used } \\\hline 15 & \text { Fabrication } & & & \\\hline 16 & \text { Finishing } & & & \\\hline 17 & & & & \\\hline 18 & & & & \text { Excess Lava } \\\hline 19 & \text { Market Mixture } & & & \\\hline 20 & & & & \\\hline 21 & & & & \text { Total Profit } \\\hline 22 & \text { Profit Contribution } & & & \\\hline\end{array}$
-What is the shadow price for the finishing hours used?

• A) 32.46
• B) 17.39
• C) 8.33
• D) 6.67

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Definitions:

Collateral

An asset offered to secure a loan or other credit, which can be seized by the lender if the loan is not repaid.

Automatic-Perfection Period

A specified timeframe following the attachment of a security interest during which the interest is considered perfected without filing.

Perfected

In legal and financial contexts, refers to having completed all necessary legal steps to enforce rights regarding a security interest against third parties.

Proceeds

The total amount of money or assets derived from a transaction, such as the sale of goods, property, or a business activity.