Answer the Following Questions Using the Information Below

question 33

Multiple Choice

Answer the following questions using the information below:
Speedy Dress Manufacturing has two workstations, cutting and finishing. The cutting station is limited by the speed of operating the cutting machine. Finishing is limited by the speed of the workers. Finishing normally waits for work from cutting. Each department works an eight-hour day. If cutting begins work two hours earlier than finishing 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 160 units. All units produced can be sold even though the change increases inventory stock by 20% from 400 units. The cost of operating the cutting department two more hours each day is $1,600. The contribution margin of the finished products is $6 each. Inventory carrying costs are $0.40 per unit per day.
-What is the change in the daily contribution margin if the change is made?

• A) $(608)
• B) $(634)
• C) $(672)
• D) $800

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Definitions:

Cohesiveness

The degree to which members of a group or team are attracted to each other and motivated to stay in the group.

Ostracism

The social exclusion or expulsion of an individual from a group or society, often used as a form of social punishment.

Broader Influence

The extended or wide-ranging effect, impact, or authority that something or someone possesses.

Specific Positions

Targeted or particular roles within an organization or structure, each with defined responsibilities and tasks.