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

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Definitions:

Vertical Line Test

A method used to determine if a graph represents a function by checking if any vertical line crosses the graph more than once.

Function

A relationship between two sets that associates every element of the first set with exactly one element of the second set.

Vertical Line Test

A method used in determining if a graph represents a function, stating that if a vertical line intersects the graph more than once, then the graph is not a function.

Function

An interaction between a collection of inputs and a series of allowed outputs, where each input has a unique output association.