The Trip Matrix and the Current Block Plan for a Company

question 108

Multiple Choice

The trip matrix and the current block plan for a company follow.The two cells in the block plan marked with "ES" are empty space.Assume that material is moved according to rectilinear distances and that the distance between adjacent centers is one unit.It costs $1 to move one unit of material over one unit of distance. Trips Between Centers
Current Block Plan
To reduce materials-handling costs,the following revised block plan is being considered.
Compute the "total cost" of each plan (current and revised) ,along with their cost difference.The total cost savings of changing over to the revised block plan is

• A)less than or equal to 50.
• B)more than 50 but less than or equal to 80.
• C)more than 80 but less than or equal to 110.
• D)more than 110.

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Definitions:

Contribution Margin

The amount remaining from sales revenue after variable expenses have been deducted, indicating the amount available to cover fixed costs and generate profit.

Gross Margin

The difference between sales revenue and the cost of goods sold, which represents the profitability of selling goods.

Gross Margin

The difference between sales revenue and the cost of goods sold, indicating the profitability of a company's core activities.

Traditional Format

An accounting income statement format that categorizes costs by their function, such as cost of goods sold, operating expenses, and other expenses.