North York Statue Company Makes Miniature Mountie Statues from Cast

question 66

Essay

North York Statue Company makes miniature Mountie statues from cast iron. Sales total 40,000 units a year. The statues are finished either rough or polished, with an average demand of 60 percent rough and 40 percent polished. Iron ingots, the direct material, costs $6 per kilogram. Processing costs are $200 to convert 20 kilograms into 40 statues. Rough statues are sold for $15 each and polished statues can be sold for $18 or engraved for an additional cost of $5. Polished statues can then be sold for $30.
Required:
Determine the product mix for statues that allows maximization of the company's operating margin.

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Definitions:

Incompatible Interests

Conflicting desires or goals among individuals or groups that make it difficult to find a common ground.

Diverse Groups

Collections of individuals from various backgrounds and characteristics, including ethnicity, culture, gender, and age, leading to heterogeneity in a population or organization.

Social Conflict

Disagreements or disputes between social groups that can arise from differences in interests, beliefs, or values.

Phenomenologists

Researchers who study human consciousness and the way individuals experience and interpret the world around them, emphasizing subjective experiences.