Figure 20-4 Heft Company Produces a and B with Contribution

question 56

Multiple Choice

Figure 20-4 Heft Company produces A and B with contribution margins per unit of $40 and $30, respectively.Only 500 labor hours and 300 machine hours are available for production.
Time requirements to produce one unit of A and B are as follows:

- Refer to Figure 20-4.What is the constraint on machine hours for Heft Company?

• A) 1A + 4B £ 500
• B) 5A + 2B £ 500
• C) 1A + 4B £ 300
• D) 40A + 30B £ 500

Analyze the role of unionization and its impact on wage rates.

Distinguish between nominal and real wages and their adjustments in response to inflation and deflation.

Recognize the global context of wages and understand how different countries compare in terms of labor compensation.

Assess the long-term trends in real wages and labor compensation.

---

Definitions:

Cash Flows

The total amount of money being transferred into and out of a business, especially as affecting liquidity.

Income Recognition

The accounting principle that revenue should only be recognized after the business has fulfilled its obligations and the payment is certain.

Direct Method

A method for creating a cash flow statement where actual cash flow information from operations is used rather than adjustments to net income.

Operating Cash Receipts

Cash received by a company from its core business operations.