Answer the Following Questions Using the Information Below

question 89

Multiple Choice

Answer the following questions using the information below:
Gourmet Baking Shop has two departments,mixing and baking.The mixing department is limited by the speed of operating the mixing machine.Baking is limited by the speed of the workers.Baking normally waits for work from mixing.Each department works an eight-hour day.If mixing begins work two hours earlier than baking each day,the two departments generally finish their work at about the same time.Not only does this eliminate the bottleneck,but also it increases finished units produced each day by 240 units.All units produced can be sold even though the change increases inventory stock by 20% from 400 units.The cost of operating the mixing department two more hours each day is $1600.The contribution margin of the finished products is $8 each.Inventory carrying costs are $0.40 per unit per day.
-What is the total production per day if the change is made?

• A)2400 units
• B)1200 units
• C)6400 units
• D)880 units

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Definitions:

Conglomerate

A large corporation that owns a collection of different companies in various sectors or industries.

Return Rate

The profit or deficit experienced by an investment during a certain period, represented as a portion of the initial investment's value.

Market Economy

An economic system in which economic decisions and the pricing of goods and services are guided solely by the aggregate interactions of a country's citizens and businesses and not by government intervention.

Investment Project

A project undertaken by individuals, companies, or governments aiming at generating future profits through capital expenditure.