Gorey Products Inc

question 2

Multiple Choice

Gorey Products Inc. makes two products—K36L and W81H. Product K36L's selling price is $345.00 and its unit variable cost is $310.50. Product W81H's selling price is $256.00 and its unit variable cost is $230.40. The monthly demand is 430 units for product K36L and 890 units for W81H. The constrained resource is a particular machine that is available for 10,000 minutes each month. Each unit of product K36L requires 15 minutes on this machine and each unit of product W81H requires 8 minutes on this machine.
-The company is considering launching a new product that would have a variable cost of $158.00 per unit and no avoidable fixed costs.It would require 9 minutes of the constrained resource.The absolute minimum acceptable selling price for the new product should be:

• A)$178.70
• B)$158.00
• C)$160.30
• D)$186.80

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Definitions:

Epiphysis

The end part of a long bone, initially growing separately from the shaft and later fusing to form mature bone.

Periosteum

A dense layer of vascular connective tissue enveloping the bones except at the surfaces of the joints.

Endosteum

A thin vascular membrane that lines the inner surface of the bone in the medullary cavity.

Supination

The outward rotation of the forearm or foot, a movement that can influence the body's alignment and function.