Logan's,Inc

question 94

Essay

Logan's,Inc.has the following production and cost data for two of its products,Basic and Supreme:

A total of 40,000 hours is available each period for the production of the two products The demand for both products is strong and Logan is not sure it can fill all orders expected to be received.
Required:
a.Ignoring qualitative issues,for which of the two products should Logan focus on filling orders first?
b.List three alternatives that Logan should consider in order to produce more units within the 40,000 hours?

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Definitions:

Effective Interest Method

A way of amortizing bond premiums or discounts over the bond's life that reflects the constant yield to maturity.

Premium Amortization

The process of gradually writing off the initial premium paid on a bond above its par value over the life of the bond.

Bonds

Bonds are financial instruments representing a loan made by an investor to a borrower, typically corporate or governmental, which pays interest over time and returns the principal at maturity.

Effective Yield

The total yield on an investment, taking into account the compounding of interest, as opposed to just the nominal rate.