Computer Products Produces Two Keyboards, Regular and Special

question 63

Multiple Choice

Computer Products produces two keyboards, Regular and Special. Regular keyboards have a unit contribution margin of $128, and Special keyboards have a unit contribution margin of $720. The demand for Regulars exceeds Computer Product's production capacity, which is limited by available machine-hours and direct manufacturing labor-hours. The maximum demand for Special keyboards is 80 per month. Management desires a product mix that will maximize the contribution toward fixed costs and profits. Direct manufacturing labor is limited to 1,600 hours a month and machine-hours are limited to 1,200 a month. The Regular keyboards require 20 hours of labor and 8 machine-hours. Special keyboards require 34 labor-hours and 20 machine-hours.
Let R represent Regular keyboards and S represent Special keyboards. The correct set of equations for the keyboard production process is:

• A) Maximize: $128R + $720S
• Constraints:
• Labor-hours: 20R + 34S ≤ 1,600
• Machine-hours: 8R + 20S ≤ 1,200
• Special: S ≤ 80
• S ≥ 0
• Regular: R ≥ 0
• B) Maximize: $128R + $720S
• Constraints:
• Labor-hours: 20R + 34S ≥ 1,600
• Machine-hours: 8R + 20S ≥≤ 1,200
• Special: S ≥ 80
• S ≥ 0
• Regular: R ≥ 0
• C) Maximize: $720S + $128R
• Constraints:
• Labor-hours: 20R + 8S ≤ 1,600
• Machine-hours: 34R + 20S ≤ 1,200
• Special: S ≤ 80
• S ≥ 0
• Regular: R ≥ 0
• D) Maximize: $128R + $720S
• Constraints:
• Labor-hours: 20R + 34S ≤ 1,600
• Machine-hours: 8R + 20S ≤ 1,200
• Special: S ≥ 80
• S ≤ 0
• Regular: R ≤ 0

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Definitions:

Institutionalization Stage

The phase within the lifecycle of an organization or process where practices and procedures become standard, stable, and deeply embedded within the organizational culture.

Learning Organizations

Organizations that actively cultivate, facilitate, and encourage the continuous learning and development of their members to adapt and thrive in a rapidly changing environment.

Unfreezing

The initial stage of the change process where current behaviors are questioned or challenged to facilitate the adoption of new behaviors.

Diagnosis

The systematic collection of information relevant to impending organizational change.