Cranston Corporation Makes Four Products in a Single Facility

question 77

Multiple Choice

Cranston Corporation makes four products in a single facility. Data concerning these products appear below:
The milling machines are potentially the constraint in the production facility. A total of 28,200 minutes are available per month on these machines.
-Which product makes the MOST profitable use of the milling machines?

• A) Product A
• B) Product B
• C) Product C
• D) Product D

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Definitions:

Direct Labor-Hours

A measure of the time directly spent by workers on producing a product or delivering a service, often used to allocate manufacturing overhead.

Overhead Applied

The allocation of overhead costs to produced goods based on a pre-determined rate or basis such as direct labor hours or machine hours.

Assembly Department

A part of a production facility where pieces are combined to form complete products.

Direct Labor-Hours

Direct labor-hours measure the amount of time workers or employees spend directly working on producing goods or providing services.