Answer the Following Questions Using the Information Below

question 80

Multiple Choice

Answer the following questions using the information below:
Captain Carl's Seascapes produces sea pictures for sale through catalogs. The company has two workstations, photo production and framing. The photo production station is limited by the speed of operating the photo development machine. Framing is limited by the speed of the employees. Framing normally waits for work from photo production. Each department works an eight-hour day. If Captain Carl's Seascapes adds an earlier half shift so that photo production begins work four hours earlier than framing each day, the two departments generally finish their work at about the same time. Not only does this eliminate the bottleneck, but it also increases finished units produced each day by 200 units. All units produced can be sold. The cost of operating the photo production department four more hours each day is $1,250. The contribution margin of the finished products is $10 each.
-The Glass Shop, a manufacturer of large windows, is experiencing a bottleneck in its plant. Setup time at one of its workstations has been identified as the culprit. A manager has proposed a plan to reduce setup time at a cost of $72,000. The change will result in 8,000 additional windows. The selling price per window is $18, direct labor costs are $3 per window, and the cost of direct materials is $5 per window. Assume all units produced can be sold. The change will result in an increase in the throughput contribution of:

• A)$104,000
• B)$80,000
• C)$32,000
• D)$8,000

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Definitions:

FDIC

The Federal Deposit Insurance Corporation, a U.S. government agency that insures deposits in banks and thrift institutions to maintain public confidence and encourage stability in the financial system.

Mergers and Acquisitions

Financial transactions in which the ownership of companies, other business organizations, or their operating units are transferred or consolidated.

Deposit Insurance

A protection scheme that guarantees a depositor's money in the event of a bank failure, up to a certain limit.

Big Banks

Large financial institutions that hold a significant portion of a country's total banking assets.