Crane Corporation Makes Four Products in a Single Facility

question 130

Multiple Choice

Crane Corporation makes four products in a single facility.Data concerning these products appear below: The milling machines are potentially the constraint in the production facility.A total of 22, 600 minutes are available per month on these machines. How many minutes of milling machine time would be required to satisfy demand for all four products?

• A)22, 600
• B)23, 700
• C)18, 400
• D)9, 000

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Definitions:

Economic Profits

The excess of total revenues over the total costs, including both explicit and implicit costs, indicating the profitability beyond the normal return of investments.

Natural Monopoly

A market condition where a single supplier can provide a product or service at a lower cost than any potential competitor, often due to economies of scale.

Average Total Cost

The total cost of production divided by the quantity produced, representing the average cost per unit of output.

Marginal Cost

The added cost incurred by producing one additional unit of a product or service.