Table 7.8 King Supply Makes Four Different Types of Plumbing Fixtures: W,X,Y

question 131

Multiple Choice

Table 7.8
King Supply makes four different types of plumbing fixtures: W,X,Y and Z.The contribution margins for these products are: $70 for Product W,$60 for Product X,$90 for Product Y and $100 for Product Z.Fixed overhead is estimated at $5,500 per week.The manufacture of each fixture 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: 70 Ws,60 Xs,50 Ys and 30 Zs. 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 7.8.Using the traditional method,what is the profit if King Supply manufactures the optimal product mix?

• A)less than or equal to $10,000
• B)greater than $10,000 but less than or equal to $11,000
• C)greater than $11,000 but less than or equal to $12,000
• D)greater than $12,000

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Definitions:

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A condition occurring when a pregnant woman's Rh-negative blood type is incompatible with her Rh-positive baby, potentially leading to health problems in the newborn.

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Antigens present on the surface of red blood cells that can cause a reaction between the blood of the mother and fetus, important in pregnancy and blood transfusion compatibility.

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A medication primarily used to treat severe acne, known for its potential risk of severe birth defects if taken during pregnancy.