ABC,Inc,Is a Small Clothing Manufacturer That Produces Shirts and Pants

question 100

Multiple Choice

ABC,Inc.,is a small clothing manufacturer that produces shirts and pants using two resources: sewing machine hours and cutting machine hours.The production manager can schedule up to 240 hours of sewing machine time and up to 150 hour cutting machine time.Production of one shirt requires 3 hours of sewing time and 1 hour of cutting time.Each pair of pants requires 2 hours of sewing time and 1.5 hours of cutting time.Each shirt yields a profit of $5,and each pair of pants generates a $6 profit.The objective is to maximize profits.Let X₁ = Number of shirts to be produced,X₂ = Number of pairs of pants to be produced.Determine the value of X₁ and X₂ (that maximizes profit) using corner point method.

• A)X₁ = 0,X₂ = 100
• B)X₁ = 120,X₂ = 0
• C)X₁ = 84,X₂ = 24
• D)X₁ = 24,X₂ = 84

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Definitions:

Weighted-Average Method

An inventory costing method that assigns a weighted average cost to each unit of inventory, based on the cost of goods available for sale and the number of units available.

Equivalent Units

Equivalent units are a concept in cost accounting used to assign costs to partially completed goods, converting them into the amount of finished goods units they represent.

Direct Materials Cost

The expenditure on raw materials that are directly involved in the production of a good or service.

Process Cost Summary

A report detailing the costs associated with each phase of the manufacturing process, showing material, labor, and overhead expenses.