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

question 72

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 bottleneck method,in what sequence should products be scheduled for production?

• A)Z,Y,X,W
• B)X,W,Z,Y
• C)Z,Y,W,X
• D)X,Y,Z,W

---

Definitions:

Planning Budget

A financial plan for a future period, outlining an organization's revenue and expenditures.

Flexible Budget

A budget that adjusts or flexes with changes in volume or activity levels.

Revenue Variances

The difference between actual revenue and budgeted or expected revenue, analyzed to understand and manage financial performance.

Spending Variances

Spending variances are the differences between the actual amount spent and the budgeted or planned amount, often analyzed to control and manage expenses better.