Roswell Inc Has 5,400 Machine Hours Available Each Month

question 26

Multiple Choice

Roswell Inc has 5,400 machine hours available each month.The following information on the company's three products is available: If market demand exceeds the available capacity,in what sequence should orders be filled to maximize the company's profits?

• A)Product 1 first,product 2 second,and product 3 third.
• B)Product 2 first,product 3 second,and product 1 third.
• C)Product 3 first,product 2 second,and product 1 third.
• D)Product 3 first,product 1 second,and product 2 thirD.P1 CM/hr = 15/3 = $5;P2: 18/2 = $9;P3: 7.50/1 = $7.50

Understand the concept and application of cost volume profit (CVP) analysis in decision making.

Calculate the break-even point in units and dollars.

Apply sensitivity analysis in CVP to assess changes in assumptions.

Explain the assumptions underlying CVP analysis and their implications.

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