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:

Work

When effort or force produces an observable result (movement), work results. In a hydraulic circuit, this means moving a load. To produce work in a hydraulic circuit, there must be flow. Work is measured in units of force multiplied by distance, for example, pound-feet.

Confined Hydraulic Circuit

A closed hydraulic system where the fluid is contained within specific boundaries, often used for precise control in machinery.

Fluid Leakage

The escape of liquids such as oil, coolant, or hydraulic fluid from their contained systems, indicating potential malfunction or wear.

Pressure Drop

Describes pressure collapse or reduction in a circuit.