The Production Planner for a Private Label Soft Drink Maker

question 66

Multiple Choice

The production planner for a private label soft drink maker is planning the production of two soft drinks: root beer (R) and sassafras soda (S) . There are at most 12 hours per day of production time and 1500 gallons per day of carbonated water available. A case of root beer requires 2 minutes of time and 5 gallons of water to produce, while a case of sassafras soda requires 3 minutes of time and 5 gallons of water. Profits for the root beer are $6.00 per case, and profits for the sassafras soda are $4.00 per case.
-What is the daily profit when producing the optimal amounts?

• A)$960
• B)$1,560
• C)$1,800
• D)$1,900
• E)$2,520

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Definitions:

Direct Method

A method of presenting the operating activities section of the statement of cash flows that reports components of cash flows from operating activities as gross receipts and gross payments.

Accounts Receivable

Represents money owed to a company by its customers for goods or services delivered but not yet paid for.

Indirect Method

A way of calculating cash flows for operational activities by starting with net income and adjusting for non-cash transactions.

Net Income

The total profit of a company after all expenses, including taxes and interest, have been deducted from revenues.