It Costs $10 to Make a Single Unit Using Regular

question 31

Multiple Choice

It costs $10 to make a single unit using regular production and $15 to make a single unit using overtime production.Total overtime production is limited to 1000 units for the five month period.The manufacturing plant has a regular production capacity of 250 units per month and 225 units in inventory at the start of the planning period.There is a $5 per unit charge for holding inventory at the end of each month and a limit of 600 units ending inventory for any period.What is the minimum cost production plan if the forecast must be met?

• A) $15,850
• B) $16,150
• C) $16,500
• D) $16,800

---

Definitions:

Common Stock

Equity ownership in a corporation, giving shareholders voting rights and a share in the company's profits through dividends.

Fair Value

An estimation of the price at which an asset or liability could be traded in a fair transaction between willing parties, other than in a forced or liquidation sale.

Par Value

The face value of a bond or stock, indicating the amount that must be repaid at maturity (for bonds) or the nominal value of a share (for stocks).

Consideration Transferred

Consideration transferred is the total value of assets, liabilities, or equity shares that an acquirer gives up in order to acquire control of a target company in a business combination.