Answer the Following Question(s)using the Information Below

question 11

Multiple Choice

Answer the following question(s) using the information below.Speedy Dress Manufacturing has two workstations, cutting and finishing.The cutting station is limited by the speed of operating the cutting machine.Finishing is limited by the speed of the workers.Finishing normally waits for work from cutting.Each department works an eight-hour day.If cutting begins work two hours earlier than finishing each day, the two departments generally finish their work at about the same time.Not only does this eliminate the bottleneck, but also it increases finished units produced each day by 160 units.All units produced can be sold even though the change increases inventory stock by 20% from 400 units.The cost of operating the cutting department two more hours each day is $1,600.The contribution margin of the finished products is $6 each.Inventory carrying costs are $0.40 per unit per day.
-What is the change in the daily contribution margin if the change is made?

• A)$(608)
• B)$(634)
• C)$(672)
• D)$800
• E)$960

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Definitions:

Wagner Act

Also known as the National Labor Relations Act, it's a foundational statute of US labor law which guarantees basic rights of private sector employees to organize into trade unions, engage in collective bargaining, and take collective action such as strikes.

Employer

An individual or organization that hires and pays people to perform work or provide services.

Union Representative

An individual elected or appointed to represent union members in discussions, negotiations, or disputes with the employer.

Wagner Act

Also known as the National Labor Relations Act of 1935, it established the legal right for workers to join unions and engage in collective bargaining in the US.