Wright Manufacturing
Wright Manufacturing Makes Picnic Tables in Three Sizes

question 63

Multiple Choice

Wright Manufacturing
Wright Manufacturing makes picnic tables in three sizes: small, medium, and large. The picnic tables can be sold with or without a finishing stain. The following information is available for each table:
$\begin{array}{lrrr}&\text { Small }& \text { Medium } & \text { Large }\\\text { Initial sales price } & \$ 60 & \$ 100 & \$ 1 / 5 \\\text { Initial cost } & 20 & 40 & 55 \\\text { Sales price after staining } & 70 & 125 & 210 \\\text { Cost of staining } & 11 & 15 & 20 \\& & & \\\text { Number sold per month } & 100 & 300 & 175\end{array}$
-What is the maximum amount that net income could increase each month with further processing?

• A) $81 125
• B) $ 5525
• C) $82 125
• D) $ 5625

Understand the purpose and method of regression analysis.

Apply regression analysis to make predictions and estimate confidence intervals.

Understand the role of the y-intercept in regression analysis.

Identify the independent variable in regression analysis.

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Definitions:

Restrictive Covenants

Restrictive covenants are clauses in contracts that impose restrictions on actions that parties to the contract can take, often used in employment agreements and real estate transactions to protect business interests.

Bond Rating

An assessment of the credit quality of a bond, generally given by a rating agency.

Specific Assets

Assets that are designated for a particular use or are unique to a business's operation.

Risk

The possibility of losing some or all of an investment, or the uncertainty surrounding the return on an investment.