A Police Department Is Trying to Allocate Crime Control Resources

question 127

Multiple Choice

A police department is trying to allocate crime control resources between murder and burglary.Detectives cost $40,000 each.Suppose that she marginal benefit of one less murder is $20,000 while the marginal benefit of one less burglary is $1,000.The number of murders and burglaries that occur at different levels of detective allocation is shown in the table. $\begin{array}{ccc}\begin{array}{c}\text { Number of } \\\underline { \text { Detectives Assigned }}\end{array} & \begin{array}{c}\text { Number of } \\\underline { \text { Murders }}\end{array} & \begin{array}{c}\text { Number of } \\\underline { \text { Burglaries }}\end{array} \\ 0 & 20 & 100 \\1 & 16 & 60 \\2 & 13 & 30 \\3 & 11 & 10 \\4 & 10 & 0\end{array}$
Suppose the police department has $160,000 to spend on detectives.Because of political pressures all four are assigned to murder prevention and none to burglary prevention.The marginal benefit gained by assigning the fourth detective to murder prevention is _____,and the marginal benefit that would have been gained had the detective been assigned to burglary prevention is ____.

• A)$20,000;$40,000
• B)$40,000;$40,000
• C)$20,000;$20,000
• D)$40,000;$20,000

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Definitions:

Work in Process

Inventory consisting of items that are in the process of being produced but are not yet finished goods.

Direct Materials Cost

The cost of raw materials directly used in the production of goods, easily traceable to the final product.

Work in Process

Inventory consisting of items that are in the production process but are not yet completed.

Predetermined Overhead Rate

A rate used to allocate overhead costs to products or job orders, calculated before the period begins based on estimated costs.