Table 7.6 Burdell Industries Makes Four Different Models of Computer Printers: the Printers

question 26

Multiple Choice

Table 7.6
Burdell Industries makes four different models of computer printers: the E-1000,the S-2000,the P-2000 and the N-1000.The E-1000 sells for $200 and has $40 in parts and $40 in labor;the S-2000 sells for $150 and requires $30 in parts and $30 in labor;the P-2000 sells for $100 and has $20 in parts and $20 in labor;and the N-1000 sells for $75 but requires only $10 of parts and $10 of labor.Fixed overhead is estimated at $5,000 per week.The manufacture of each printer requires four machines,Machines #1,2,3 and 4.Each of the machines is available for 40 hours a week and there is no setup time required when shifting from the production of one product to any other.The processing requirements to make one unit of each product are shown in the table.Weekly product demand for the next planning period has been forecasted as follows: 80 E-1000s;65 S-2000s;35 P-2000s;and 20 N-1000s. In the questions that follow,the traditional method refers to maximizing the contribution margin per unit for each product,and the bottleneck method refers to maximizing the contribution margin per minute at the bottleneck for each product.
-Use the information in Table 7.6.Using the bottleneck method,what is the profit if Burdell manufactures the optimal product mix?

• A)less than or equal to $10,000
• B)greater than $10,000 but less than or equal to $13,000
• C)greater than $13,000 but less than or equal to $16,000
• D)greater than $16,000

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Definitions:

Prepuchase Behavior

Actions and decision-making processes undertaken by consumers before making the final decision to buy a product or service, including research and evaluation of alternatives.

Information Search

The process consumers go through to gather information about products or services before making a purchasing decision.

Problem Recognition

The initial step in the purchase decision process, where the consumer recognizes a need or problem that requires resolution.

Alternative Evaluation

The stage in the consumer decision-making process where potential products or services are assessed and compared against each other based on criteria such as features, price, and quality.