Sienna Company Produces Earrings,bracelets,and Necklaces That Are in High Demand

question 166

Multiple Choice

Sienna Company produces earrings,bracelets,and necklaces that are in high demand.Following is information for each of these products:

Sienna has 2,000 machine hours available each month.Demand for each item exceeds Sienna's capacity to produce the item.In order to maximize the company's total contribution margin,in what sequence should Sienna fill orders for the three products?

• A) Necklaces first,then bracelets,then earrings.
• B) Earrings first,then necklaces,then bracelets.
• C) Bracelets first,then earrings,then necklaces.
• D) Necklaces first,then earrings,then bracelets.

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Definitions:

Direct Labor

The labor costs directly associated with the manufacture of products or delivery of services.

Standard Costs

The expected costs associated with producing a product or performing a service, used for budgeting and performance analysis.

Hours

A measure of time representing 60 minutes, often used to track labor or production time in business.

Cost of Goods Sold

The expenses directly associated with manufacturing the products that a company sells.