Consider the Portion of the Sensitivity Analysis Report That Follows

question 89

Multiple Choice

Consider the portion of the sensitivity analysis report that follows.The shadow price of $3.2 is valid as long as the right-hand constraint of 150 is within the range of ______. $$\begin{array} { | l | l | l | l | l | l | l | } \hline \text { Cell } & \text { Name } & \begin{array} { l } \text { Final } \\\text { Value }\end{array} & \begin{array} { l } \text { Shadow } \\\text { Price }\end{array} & \begin{array} { l } \text { Constraint } \\R \mathrm { H } \text {. Side }\end{array} & \begin{array} { l } \text { Allowable } \\\text { Increase }\end{array} & \begin{array} { l } \text { Alowable } \\\text { Decrease }\end{array} \\\hline \$ 1 \$ 7 & \begin{array} { l } < = \\\text { Usage }\end{array} & 240 & 0.6 & 240 & 210 & 40 \\\hline \$ 1 \$ 8 & \begin{array} { l } < = \\\text { Usage }\end{array} & 150 & 3.2 & 150 & 30 & 70 \\\hline\end{array}$$

• A)30 to 70
• B)30 to 150
• C)150 to 220
• D)80 to 180

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Definitions:

Cost Per Equivalent Unit

The total cost of production, both direct and indirect, divided by the number of equivalent units produced, considering the stage of completion.

Conversion Costs

Costs incurred to convert raw materials into finished products, typically comprising labor and overhead expenses.

Weighted-Average Method

An inventory costing method that averages the cost of all similar goods available during a period to determine the value of inventory.

Conversion Costs

The combined costs of direct labor and manufacturing overhead, representing the costs necessary to convert raw materials into finished goods.