Table 5.3 King Supply Makes Four Different Types of Plumbing Fixtures: W

question 57

Multiple Choice

Table 5.3
King Supply makes four different types of plumbing fixtures: W, X, Y and Z. The contribution margins for these products are: $70 for Product W, $60 for Product X, $90 for Product Y and $100 for Product Z. Fixed overhead is estimated at $5,500 per week. The manufacture of each fixture requires four machines, Machines #1, 2, 3 and 4. Each of the machines is available for 40 hours a week and there is no setup time required when shifting from the production of one product to any other. The processing requirements to make one unit of each product are shown in the table. Weekly product demand for the next planning period has been forecasted as follows: 70 Ws, 60 Xs, 50 Ys and 30 Zs.

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 5.3. Using the bottleneck method, what is the optimal product mix?

• A) 70 W, 60 X, 90 Y, 100 Z
• B) 70 W, 50 X, 50 Y, 30 Z
• C) 70 W, 60 X, 47 Y, 30 Z
• D) 70 W, 47 X, 50 Y, 30 Z

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Definitions:

Adjusted Cash Balance

An amount reflecting the true cash balance after accounting for outstanding checks or deposits in transit.

Check Register

A check register is a record book used to track checks written, deposits made, and the current balance of a checking account.

Closed Account

A bank or credit account that has been terminated, either by the customer or the financial institution, often due to inactivity or zero balance.

Bank Statement

A document issued by a bank detailing all transactions in a customer's account over a specified period.