Figure 3-3 The Sandoval Company Has Four Process Engineers That Are Each

question 188

Multiple Choice

Figure 3-3
The Sandoval Company has four process engineers that are each able to process 1,500 design changes. Last year 5,250 design changes were produced by the four engineers. Each engineer is paid $60,000 per year
-Refer to Figure 3-3. Calculate the unused capacity.

• A) 750 change orders
• B) 1,375 change orders
• C) 4,000 change orders
• D) 2,000 change orders

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Definitions:

Uncontrollable Costs

Uncontrollable costs are expenses that cannot be directly managed or influenced by actions of the business or its managers, often due to external factors.

Investment Center

A division or unit within an organization that is responsible for its own revenue, expenses, and investments, and is evaluated on its profitability.

Profit Center

A profit center is a segment or area of a business that is responsible for generating its own revenues and hence directly contributes to the company's overall profit.

Indirect Expenses

Costs that are not directly attributable to a specific product or service but are necessary for the operation of a business, such as utilities or rent.