A Company Is Developing Its Weekly Production Plan

question 16

Multiple Choice

A company is developing its weekly production plan. The company produces two products, A and B, which are processed in two departments. Setting up each batch of A requires $60 of labor while setting up a batch of B costs $80. Each unit of A generates a profit of $17 while a unit of B earns a profit of $21. The company can sell all the units it produces. The data for the problem are summarized below. The decision variables are defined as
X_i = the amount of product i produced
Y_i = 1 if X_i > 0 and 0 if X_i = 0
What is the objective function for this problem?

• A)MAX: 17 X₁ + 21 X₂
• B)MAX: 17 X₁ + 21 X₂ - 60 Y₁ -80 Y₂
• C)MIN: 17 X₁ + 21 X₂ - 60 Y₁ -80 Y₂
• D)MIN: 60 Y₁ + 80 Y₂

Recognize the importance of final goods in GDP calculation to avoid multiple counting.

Identify the components of the shadow (unreported) economy and its implications on GDP.

Understand the expenditures approach to GDP calculation and its components.

Comprehend the basic economic resources and their significance in the economy.

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Definitions:

Intra-entity Gross Profit

Refers to the profit generated from transactions within the same company or group, not yet realized from an external party's perspective.

Consolidation Process

The method of combining the financial statements of two or more legally separate entities into one set of financial statements for the group as a whole.

Voting Common Stock

Refers to a class of shares that grants the holder the right to vote on company matters and board elections.

Consolidation Entry TI

Consolidation Entry TI (Transaction Information) involves the adjustments and eliminations made during the consolidation process to accurately reflect the group's financial position as if the entities operated as a single entity.