The Wester Corporation Produces Three Products with the Following Costs

question 153

Multiple Choice

The Wester Corporation produces three products with the following costs and selling prices:
The company has insufficient capacity to fulfill all of the demand for these three products.
-If direct labor hours are the constraint,then the ranking of the products from the most profitable to the least profitable use of the constrained resource is:

• A) A, B, C
• B) B, A, C
• C) C, A, B
• D) A, C, B

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Definitions:

Surplus

The situation in which the quantity of a good or service supplied exceeds the quantity demanded at the current price.

Federal Food Distribution

Programs and services run by the government to distribute food to the needy, schools, and other institutions to ensure food security.

Agricultural Commodities

Basic goods used in commerce that are interchangeable with other goods of the same type, produced through farming activities.

Price Support Program

Governmental policies designed to maintain the price of a commodity at a certain level, to protect producers from market volatility.