Table 5.3 King Supply Makes Four Different Types of Plumbing Fixtures: W

question 89

Multiple Choice

Table 5.3
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 5.3. 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:

Drives Satisfaction

The process of fulfilling biological and psychological needs or desires that motivate behaviors.

Superego

In psychoanalytic theory, the part of personality that represents internalized moral standards and ideals, guiding behavior towards socially acceptable actions.

Archetype

In psychology, universal, innate models or symbols found in the unconscious that shape human thoughts, behaviors, and experiences.

Moral Guardian

An individual or entity that assumes the responsibility of guiding others towards what they perceive as moral or ethical behavior.