Dunford Company Produces Three Products with the Following Costs and Selling

question 124

Multiple Choice

Dunford Company produces three products with the following costs and selling prices:
-If Dunford has a limit of 20,000 direct labor hours but no limit on units sold or machine hours,then the ranking of the products from the most profitable to the least profitable use of the constrained resource is:

• A)X,Y,Z
• B)Y,Z,X
• C)X,Z,Y
• D)Z,Y,X

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Definitions:

GAAP

Generally Accepted Accounting Principles, which are a collection of commonly-followed accounting rules and standards for financial reporting.

Absorption Costing

An accounting method that includes all manufacturing costs - direct materials, direct labor, and both variable and fixed overhead - in the cost of a product.

Pricing

The process of determining the value at which goods or services will be sold, often considering factors such as production costs, market demand, and competition.

Absorption Costing

An accounting method that includes all manufacturing costs - direct labor, materials, and overhead - in the cost of a product.