Table 7.7 A Company Makes Four Products That Have the Following Characteristics

question 12

Multiple Choice

Table 7.7
A company makes four products that have the following characteristics: Product A sells for $75 but needs $20 of materials and $20 of labor to produce;Product B sells for $90 but needs $45 of materials and $20 of labor to produce;Product C sells for $110 but needs $50 of materials and $30 of labor to produce;Product D sells for $135 but needs $75 of materials and $40 of labor to produce.The processing requirements for each product on each of the four machines are shown in the table. Work centers W,X,Y,and Z are available for 40 hours per week and have no setup time when switching between products.Market demand is 50 As,60 Bs,70 Cs,and 80 Ds per week.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 7.7.Using the bottleneck method,what is the profit if the company manufactures the optimal product mix (consider variable costs only-overhead is not included in this profit calculation) ?

• A)less than or equal to $6,500
• B)greater than $6,500 but less than or equal to $6,700
• C)greater than $6,700 but less than or equal to $6,900
• D)greater than $6,900

---

Definitions:

Letter of Condolence

A written expression of sympathy and support to someone who has recently experienced the loss of a loved one.

Support Group

A gathering of people who share common experiences, challenges, or problems, offering each other advice, empathy, and encouragement.

Bereaved Person

A rephrased definition: Someone who is dealing with the emotional pain and loss following the death of a close associate or relative.

Social Disengagement

A theory that older people gradually withdraw from social participation and relationships, often as a natural part of aging.