Answer the Following Question(s)using the Information Below

question 150

Multiple Choice

Answer the following question(s) using the information below.Quick Shop Printing has two workstations, cutting and pasting.The cutting station is limited by the speed of operating the cutting machine.Pasting is limited by the speed of the workers.Pasting normally waits on work from cutting.Each department works an eight-hour day.If cutting begins work two hours earlier than pasting each day, the two departments generally finish their work at about the same time.Not only does this eliminate the bottleneck, but it increases finished units produced each day by 80 units.All units produced can be sold.The cost of operating the cutting department two more hours each day is $800.The contribution margin of the finished products is $3 each.Inventory carrying costs are $0.20 per unit per day.
-Which of the following is NOT a key step in managing bottleneck resources?

• A)Recognize that the bottleneck resource determines throughput contribution of the plant as a whole.
• B)Search and find the bottleneck resource by identifying resources with large quantities of inventory waiting to be worked on.
• C)Keep the bottleneck operation busy and subordinate all nonbottleneck resources to the bottleneck resource.
• D)Reduce the number of employees who work in the bottleneck area.
• E)Take action to increase bottleneck efficiency and capacity.

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Definitions:

Reciprocal Services Method

An accounting method used to allocate costs among different departments within an organization that provide services to each other.

Proportional Usage

Proportional usage refers to the allocation or consumption of resources, assets, or services in a manner that is in accordance with their relative proportion or share.

Algebraic Equation

A mathematical statement that shows the equality of two expressions, usually involving variables and constants, related by operations like addition, subtraction, multiplication, and division.

Sequential Method

The sequential method is an approach to allocating service department costs to production departments in a linear fashion, based on a predetermined order or sequence.