A Company Has Three Products (X, Y, and Z) That

question 158

Multiple Choice

A company has three products (X, Y, and Z) that it sells, packs, and ships to its customers. Because the products have different sizes they also have different packing and shipping costs so we will use a new measure-a packing/shipping unit. Because Product Y is the smallest of the three products, we will assign it a value of 1 packing/shipping unit. Product X is twice as big as Product Y and Product Z is four times as big as Product Y. If, on a monthly basis, this company sells an average of 1,500 units of Product X, 800 units of Product Y, and 60 units of Product Z, how many packing/shipping units should it allocate to Product Z per month (to the nearest whole number) ?

• A) 240
• B) 424
• C) 620
• D) 800
• E) 3,000

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Definitions:

Vouchers Payable

An accounting term that represents the obligation of a business to pay for goods or services that have been received, but not yet paid for.

Purchases Discount

A contra-cost account in the general ledger that records discounts offered by vendors of merchandise for prompt payment of purchases by buyers.

Merchandise

Goods brought into a store for resale to customers.

Purchase Discounts

Reductions in price given by a supplier to a buyer for early payment within a specified period.