The Nelson Company Has Four Distribution Centers (A, B, C

question 38

Multiple Choice

The Nelson Company has four distribution centers (A, B, C, and D) that require shipments of 20, 30, 40, and 10 units per week, respectively. Its three plants (1, 2, and 3) have monthly capacities of 40, 30, and 30, respectively. Shipping costs (in $) follow.

• A) It is not feasible in terms of plant capacities.
• B) It is not feasible in terms of satisfying distribution center demands.
• C) It is feasible, and the weekly shipping cost is less than $1,600.
• D) It is feasible, and the weekly shipping cost is greater than $2,000. What can be said about a plant that ships 40 units from 1 to C, 30 units from 2 to B, 20 units from 3 to A, and 10 units from 3 to D?

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Definitions:

Outstanding Receivables

are amounts owed to a business by its customers for goods or services delivered but not yet paid for.

FMV

Fair Market Value; the price that property would sell for on the open market between a willing buyer and a willing seller.

Basis

In tax terms, it refers to the amount of a taxpayer's investment in property for tax purposes, used to calculate gain or loss on the sale or disposition of the property.

Inventory

Assets that are held for sale in the ordinary course of business, or in the process of being produced for such sale, or in the form of materials to be consumed in the production process.