A Fitness Center Is Trying to Determine How to Allocate

question 22

Multiple Choice

A fitness center is trying to determine how to allocate funds for advertising. The manager decides to advertise on the radio and in the newspaper. Previous experience with such advertising leads the manager to expect responses when r adds are run on the radio and n adds appear in the newspaper. Each ad on the radio costs $13 and each newspaper ad costs $3. Using Lagrange multipliers, a student found that when $504 are budgeted for advertising, the maximum number of responses occurred from 26 radio ad and 56 newspaper ads and had Suppose the manager budgeted an additional $22 for advertising. What is the approximate change in the optimal value as a result of this change in the constraint level?

• A) 2,710 additional response
• B) 484 additional responses
• C) 22 additional responses
• D) 367 additional responses
• E) 1 additional response

---

Definitions:

Actual Hours

The real number of hours worked or spent on a specific task or project, as opposed to planned or estimated hours.

Direct Labour Rate Variance

The difference between the actual wages paid to workers and the standard cost of those wages for the actual hours worked.

Labour Efficiency Variance

A metric used to measure the difference between the actual hours worked and the standard hours expected to complete a task.

Standard Rate (SR)

Standard Rate (SR) refers to a predefined or established cost or value used in financial and operational calculations, often applied in budgeting and cost accounting.