Table 7.5 A Company Makes Four Products That Have the Following Characteristics

question 118

Multiple Choice

Table 7.5
A company makes four products that have the following characteristics: Product A sells for $50 but needs $10 of materials and $15 of labor to produce;Product B sells for $75 but needs $30 of materials and $15 of labor to produce;Product C sells for $100 but needs $50 of materials and $30 of labor to produce;Product D sells for $150 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 for each product is 80 units 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 7.5.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 $8,100
• B)greater than $8,100 but less than or equal to $8,300
• C)greater than $8,300 but less than or equal to $8,500
• D)greater than $8,500

---

Definitions:

Maintaining Employees

Strategies and practices aimed at retaining staff and preventing turnover by ensuring job satisfaction and engagement.

Employee Pension Fund

An employee pension fund is a retirement plan funded by contributions from both an employer and its employees, designed to provide financial security for employees in their retirement.

Outside Specialist

An expert brought into an organization to provide insights, advice, or services in a specific field where the existing staff lacks expertise or resources.

HR Department

The department in an organization that is responsible for hiring, training, employee relations, and benefits among other functions related to the workforce.