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Table 5.1 A Company Makes Four Products That Have the Following Characteristics

question 25

Multiple Choice

Table 5.1
A company makes four products that have the following characteristics: Product A sells for $50 but needs $10 of materials and $15 of labor to produce; Product B sells for $75 but needs $30 of materials and $15 of labor to produce; Product C sells for $100 but needs $50 of materials and $30 of labor to produce; Product D sells for $150 but needs $75 of materials and $40 of labor to produce. The processing requirements for each product on each of the four machines are shown in the table.

Work centers W, X, Y, and Z are available for 40 hours per week and have no setup time when switching between products. Market demand for each product is 80 units per week. In the questions that follow, the traditional method refers to maximizing the contribution margin per unit for each product, and the bottleneck method refers to maximizing the contribution margin per minute at the bottleneck for each product.
-Use the information in Table 5.1. Using the bottleneck method, what is the profit if the company manufactures the optimal product mix (consider variable costs only-overhead is not included in this profit calculation) ?

Definitions:

Use Additional Code

An instruction in medical coding indicating that a secondary code should be used to provide more detailed information about a condition or treatment.

Tabular List

A structured list used for organizing data or information in a table format for easy reference.

Excludes Note

A term used in medical coding to signify that certain conditions are to be coded elsewhere or are not included for coding with the code being referenced.

Includes Note

A term used in medical coding and classification to specify that a particular category or code also includes certain conditions or concepts.