Scenario C.1 Jerry Allison Is in Charge of Production for a Small

question 49

Multiple Choice

Scenario C.1
Jerry Allison is in charge of production for a small producer of plumbing supplies. The cricket model has an estimated annual demand of 12,000 units and can be produced at a production rate of 90 units per day. The company produces (and sells) the cricket 300 days per year. Setup cost to produce this model averages $22 and the item has a holding cost of $3 per unit per year.
-Use the information in Scenario C.1. How many production runs per year are needed if Jerry chooses to produce at his economic production lot size (ELS) ?

• A) fewer than or equal to 10 runs
• B) greater than 10 runs but fewer than or equal to 20 runs
• C) greater than 20 runs but fewer than or equal to 30 runs
• D) greater than 30 runs

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Definitions:

Municipal Bonds

Bonds issued by local, state, or county governments to finance public projects, typically offering tax-exempt interest payments.

Deferred Income Taxes

Tax liabilities that arise due to timing differences between the recognition of income and expenses in the financial statements and their recognition in the tax returns, deferred to future periods.

Life Insurance Proceeds

The amount of money paid out to the beneficiary of a life insurance policy upon the death of the insured or at the policy's maturity.

Deferred Tax Liability

An accounting term representing a tax obligation that a company owes but is allowed to pay at a future date.