A Company Can Decide How Many Additional Labor Hours to Acquire

question 22

Essay

A company can decide how many additional labor hours to acquire for a given week.Subcontractors will only work a maximum of 20 hours a week.The company must produce at least 200 units of product A,300 units of product B,and 400 units of product C.In 1 hour of work,worker 1 can produce 15 units of product A,10 units of product B,and 30 units of product C.Worker 2 can produce 5 units of product B,20 units of product B,and 35 units of product C.Worker 3 can produce 20 units of product A,15 units of product B,and 25 units of product C.Worker 1 demands a salary of $50/hr,worker 2 demands a salary of $40/hr,and worker 3 demands a salary of $45/hr.The company must choose how many hours they should hire from each worker to meet their production requirements and minimize labor cost.The sensitivity report is displayed below.

Answer the following questions:
a.How much of products A,B,and C should be produced?
b.Which constraints are binding? Which constraints are non-binding?
c.If constraint 2 is relaxed by one unit,how will the objective value be affected?

Comprehend the effects of consolidating securitization entities on a firm's financial statements.

Understand the concept and calculation of operating income under different production levels.

Calculate and interpret direct materials price variance.

Analyze the impact of production level changes on variable and fixed costs, and operating income.

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Definitions:

Phosphorus

A chemical element, essential for life, involved in many cellular processes, including energy transfer and the structure of DNA and RNA.

Inhalation

The act of drawing air or other substances into the lungs.

Primary Consumers

Organisms that feed directly on producers in a food chain, typically herbivores that eat plants.

Trophic Level

The position an organism occupies in a food chain, indicating its level of feeding and energy transfer.