Answer the Following Question(s)using the Information Below

question 121

Multiple Choice

Answer the following question(s) using the information below.John's 8-year-old Chevrolet Trail Blazer requires repairs estimated at $6,000 to make it roadworthy again.His wife, Sherry, suggested that he should buy a 5-year-old used Jeep Grand Cherokee instead for $6,000 cash.Sherry estimated the following costs for the two cars:

-Boyd Tool Company is a tool manufacturer.Production capacity is 3,000 units per month; however, they are considering alternative ways to increase capacity to 3,500 units.One of the alternatives involves purchasing new equipment.In this alternative, there are two choices: machine A will provide increased capacity of 4,000 units per month, with unit costs of $14 at capacity; and, machine B will increase capacity to 3,600 units per month with unit costs of $15 at capacity.Both machines are adequate since Boyd's does not intend to go beyond the 3,500 units per month level for the foreseeable future.Relevant information for this decision includes

• A)whether other costs will change solely due to a capacity increase.
• B)the different unit cost of production between the two machine at their capacity levels.
• C)Boyd's planned capacity utilization.
• D)excess capacity of either machine.
• E)the different unit cost of production between the two machines at Boyd's planned capacity levels.

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Definitions:

LLC

Limited Liability Company, a business structure that combines the pass-through taxation of a partnership or sole proprietorship with the limited liability of a corporation.

Organization

An entity, such as a company or society, formed by a group of people for a particular purpose.

Operating Agreement

A document detailing the management and operational protocols for a limited liability company (LLC) between its members.

Articles of Organization

Legal documents filed with a state government to legally document the creation of a limited liability company (LLC).