ACTech Manufacturing Appliances Manufactures Three Sizes of Kitchen Appliances: Small,medium,and

question 20

Multiple Choice

A.C.Tech Manufacturing Appliances manufactures three sizes of kitchen appliances: small,medium,and large.Product information is provided below.


The maximum machine-hours available are 6,500 per week.
Which of the three product models should be produced first if management incorporates a short-run profit maximizing strategy?

• A)small appliance
• B)medium appliance
• C)large appliance
• D)both medium and large appliance

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Definitions:

Cost of Debt

The effective rate that a company pays on its total debt, representing the interest expense on all outstanding debts.

Marginal Tax Rates

The rate of additional federal income tax that applies to each additional dollar of taxable income, indicating the percentage of tax applied to your income for each tax bracket in which you qualify.

Straight-Line Depreciation

A method of allocating the cost of a fixed asset evenly over its useful life.

Lease Payments

Regular payments made by a lessee to a lessor for the use of an asset over a specified period.