While Glancing Over the Sensitivity Report, You Note That the Stitching

question 56

Multiple Choice

While glancing over the sensitivity report, you note that the stitching labor has a shadow price of $10 and a lower limit of 24 hours with an upper limit of 36 hours. If your original right hand value for stitching labor was 30 hours, you know that:

• A) the next worker that offers to work an extra 8 hours should receive at least $80.
• B) you can send someone home 6 hours early and still pay them the $60 they would have earned while on the clock.
• C) you would be willing pay up to $60 for someone to work another 6 hours.
• D) you would lose $80 if one of your workers missed an entire 8 hour shift.

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Definitions:

General Journal

A basic accounting ledger used to record all the financial transactions of a business.

General Ledger

A complete record of a company's financial transactions over the lifespan of the organization, serving as the foundation of its financial reporting.

Expenses Account

An accounting ledger that reflects the costs incurred by a business in the process of earning revenue.

Revenue Account

A record that monitors the revenue a firm produces through its regular business activities.