Suppose That the Shadow Price for Assembly Time Is $5/hour

question 79

Multiple Choice

Suppose that the shadow price for assembly time is $5/hour. The allowable increase for the assembly time constraint is 40 hours, and the allowable decrease is 30 hours. If all assembly hours were used under the initial LP solution and workers normally make $4/hour but can work overtime for $6/hour, what should management do?

• A) do not change available hours for assembly time
• B) decrease available hours for assembly time by 30 hours
• C) increase available hours for assembly time by 40 hours
• D) decrease available hours for assembly time by 5 hours
• E) increase available hours for assembly time by 5 hours

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Definitions:

Graded

A term typically used in education to describe the evaluation of work or performance by assigning a level, score, or category.

Straight-Line Method

A depreciation method that allocates an equal portion of the initial cost of an asset to each accounting period over the asset's useful life.

Salvage Value

Salvage value is the estimated resale value of an asset at the end of its useful life, considered in depreciation calculations.

Depreciation Expense

Distributing the cost of a material asset methodically across its productive life.