If P_ij = the Production of Product I in Period

question 3

Multiple Choice

If P_ij = the production of product i in period j, then to indicate that the limit on production of the company's three products in period 2 is 400,

• A) P₂₁ + P₂₂ + P₂₃ ≤ 400
• B) P₁₂ + P₂₂ + P₃₂ ≤ 400
• C) P₃₂ ≤ 400
• D) P₂₃ ≤ 400

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Definitions:

Fixed Manufacturing Overhead

The set of manufacturing costs that do not vary with the level of production, such as salaries of factory supervisors and rent of the manufacturing facility.

Manufacturing Overhead Budget

A plan that outlines the expected manufacturing overhead costs for a period, helping businesses control and allocate expenses effectively.

Direct Labor-Hour

A measure of the labor time directly involved in producing goods, often used to allocate labor costs to products.

Variable Manufacturing Overhead

Costs in manufacturing that vary with the level of production output, such as utilities and indirect materials.