Scenario 9.9 "Gollee Those Cats Sure Go Through a Lot of Food

question 178

Multiple Choice

Scenario 9.9
"Gollee those cats sure go through a lot of food," Geoff exclaimed as he saw the shopping list pad that had been pre-printed with the words "cat food" at the top. He pondered a different approach to shopping for the furry little darlings, reviewed his shopping records, and discovered the following. The price of cat food has held steady at 89 cents per can. Despite feigning indifference, each of the seven cats nibbles their way through an average of one can per day, three hundred sixty five days a year. The price of gasoline has held constant at $3.50 per gallon and his pickup uses a gallon each way to the cat food store. The cost to hold a can of cat food is 10% of the unit price.
-Use the information in Scenario 9.9 to determine the average pantry space occupied by cat food if each can takes up 13 cubic inches and Geoff obeys an EOQ policy for managing the cat food purchase process.

• A) 2.4 cubic feet
• B) 24 cubic feet
• C) 4.8 cubic feet
• D) 12 cubic feet

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Definitions:

Indirect Manufacturing Cost

This refers to costs that are used in the production process but cannot be directly traced to a specific product, including expenses like maintenance, utilities, and management salaries.

Produced Units

The quantity of items manufactured during a specific period, reflecting the output of a production process.

Direct Manufacturing Cost

The sum of all costs directly involved in the production of a product, including direct labor and materials, but excluding indirect expenses.

Produced Units

The total quantity of completed goods produced by a company over a given time frame.