Austin Wool Products Purchases Raw Wool and Processes It into Yarn

question 134

Multiple Choice

Austin Wool Products purchases raw wool and processes it into yarn. The spindles of yarn can then be sold directly to stores, or they can be used by Austin Wool Products to make afghans. Each afghan requires one spindle of yarn. Current cost and revenue data for the spindles of yarn and for the afghans are as follows:



Each month 4,000 spindles of yarn are produced that can either be sold outright or processed into afghans.

-If Austin produced and sold 4,000 afghans and zero spindles of yarn the total contribution margin would be closed to:

• A) $24,000.
• B) $40,000.
• C) $60,000.
• D) $8,000.

---

Definitions:

Shopping Mall

A large retail complex containing various stores, restaurants, and often entertainment facilities, designed for consumers to shop at multiple outlets in one location.

Uniformed Services Employment

Uniformed Services Employment refers to rights and resources available for employees who are members of the military and other uniformed services, typically regarding job security and reemployment.

Reemployment Rights Act (USERRA)

A U.S. federal law that protects military service members' civilian jobs and benefits upon returning from duty.

Office of Federal Contract Compliance Programs

A U.S. Department of Labor agency responsible for ensuring that employers doing business with the Federal government comply with the laws and regulations requiring non-discrimination and affirmative action.