The Owner of Crackers, Inc

question 43

Multiple Choice

The owner of Crackers, Inc., produces two kinds of crackers: Deluxe (D) and Classic (C) . She has a limited amount of the three ingredients used to produce these crackers available for her next production run: 4,800 ounces of sugar; 9,600 ounces of flour, and 2,000 ounces of salt. A box of Deluxe crackers requires 2 ounces of sugar, 6 ounces of flour, and 1 ounce of salt to produce; while a box of Classic crackers requires 3 ounces of sugar, 8 ounces of flour, and 2 ounces of salt. Profits for a box of Deluxe crackers are $.40; and for a box of Classic crackers, $.50. What are profits for the optimal production combination?

• A)$800
• B)$500
• C)$640
• D)$620
• E)$600

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Definitions:

Common Stock

Common stock represents ownership shares in a corporation, giving holders voting rights and potential dividends, but with lower priority in bankruptcy.

Par Value

The face value of a bond or stock as stated on the certificate or instrument, which does not necessarily reflect its market value.

Fair Value

The proceeds from divesting an asset or the expense for reallocating a liability in a conventional transaction between market stakeholders at the calculation date.

Investment Account

An account held at a financial institution that is used to buy and hold various investment securities, such as stocks and bonds.