Johnny Now, Inc

question 54

Multiple Choice

Johnny Now, Inc. produces two different models of outhouses. Demand next period is expected to be 12,000 and 18,000 units for Models A and B, respectively. Model A has CPOPF planning factors of 0.75 and 0.60 for direct labor and machine time, respectively. Model B has CPOPF planning factors of 0.50 and 0.80 for direct labor and machine time, respectively. Historically department G uses 24% of the direct labor and machine time for these products, while department H uses the remaining 76%. What is the direct labor time requirement for department G next period?

• A) 4,320 hours
• B) 13,680 hours
• C) 18,000 hours
• D) 9,000 hours
• E) 5,184 hours

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Definitions:

Future Earnings

The projected income a company is expected to earn in future periods, often used by investors to evaluate the firm's growth potential and value.

Unbiased

Free from bias; presenting a fair, objective representation of facts or information.

Market's Earnings Expectations

Investor anticipations or forecasts about a company's future earnings performance.

Fair Value

The estimated market value of an asset, liability, or financial instrument that is agreed upon by both the buyer and seller.