In a Workcenter, Machine a Has a Ten Minute Set-Up

question 29

Multiple Choice

In a workcenter, machine A has a ten minute set-up time per batch and a two minute per unit run time. Machine B performs the identical function but has a set-up time of thirty minutes and a one minute run time per unit.The workcenter makes products in batches ranging from one unit to one hundred units.Assuming capacity is not a limitation on either machine, on which batches should machine B be used?

• A)All batches should be run on machine B
• B)Batches of more than 20 units should be run on machine B
• C)Batches of fewer than 80 units should be run on machine B
• D)Batches with up to 50 units should be run on machine B
• E)No batches should be run on machine B

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Definitions:

Fair Value

The obtainable price for liquidating an asset or the charge to shift a liability in a planned engagement with market operatives at the time of determining value.

Investment Account Balance

The total value of all the investments held in an investor's account, including stocks, bonds, mutual funds, and other assets.

Equity Method

An accounting technique used to record investments in other companies where the investor has significant influence but not full control.