Pillsbury Corporation Makes Two Types of Ice Cream: Chocolate and Peanut

question 5

Multiple Choice

Pillsbury Corporation makes two types of ice cream: Chocolate and Peanut Butter. Operating information from the previous year follows: $\begin{array} { l r r } & \text { Chocolate } & \text { Peanut Butter } \\\text { Units produced and sold } & 6,000 & 5,000 \\\text { Machine hours used } & 6,000 & 2,500 \\\text { Sales price per unit } & \$ 8 & \$ 11 \\\text { Variable cost per unit } & \$ 5 & \$ 9\end{array}$ Fixed costs of $30,000 per year are presently allocated equally between both products. If the product mix were to change, total fixed costs would remain the same. Assuming there is unlimited demand for both products and Pillsbury has 20,000 machine hours available, how many units of each product should be produced and sold respectively?

• A)0, 0.
• B)0, 40,000.
• C)6,000, 20,000.
• D)6,000, 40,000.
• E)20,000, 0.

Explain the use of various diagrams and tools (e.g., Pareto charts, scatter diagrams) in identifying and solving quality problems.

Distinguish between different costs associated with quality and identify strategies for managing them.

Discuss the evolution of quality management practices and standards, including ISO 9000, and understand the significance of conforming quality vs. target-oriented quality.

Understand the basic concepts of capital budgeting techniques including NPV, IRR, and payback method.

---

Definitions:

Plagioclase

A very common rock-forming feldspar mineral that contains sodium, calcium, or both elements.

Crystallization

The process by which a solid forms, where the atoms or molecules are highly structured in a pattern extending in all three spatial dimensions.

Felsic Minerals

Light-colored minerals that are rich in silica and aluminum, commonly found in continental crust rocks like granite.

Mafic Minerals

Dark-colored minerals that are rich in magnesium and iron, commonly found in basalt and gabbro.