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objective 11 4 1 determining which products should be produced when the plant is ope 4301334

 

Objective 11.4

 

1) Determining which products should be produced when the plant is operating at full capacity is referred to as a(n) ________.

A) outsourcing analysis

B) total alternative approach

C) product-mix decision

D) short-run focus decision

 

2) Product mix decisions ________.

A) have a long-run focus

B) help determine how to maximize operating profits

C) focus on selling price per unit

D) help maximizing opportunity costs

 

3) Capacity constraints include ________.

A) increased demand of warranty services for a pharmaceutical product

B) increased need of display space for a retailer

C) decreased demand for a pharmaceutical product

D) increased fuel efficiency of cars

 

4) With a constraining resource, managers should choose the product with the ________.

A) lowest contribution margin per unit of the constraining resource

B) highest sales price

C) highest contribution margin per unit of the constraining resource

D) highest gross profit

 

5) Which of the following methods is used to determine the most profitable production schedule and the most profitable product mix?

A) balanced scorecard

B) cause and effect diagram

C) transfer pricing

D) linear programming

6) In product-mix decisions, managers should ________.

A) always focus on maximizing total contribution margin

B) only focus on the product with the greatest contribution margin per machine-hour

C) only focus on the full costs of the product

D) always focus on maximizing the selling price of the product

 

Answer the following questions using the information below:

 

Dynondo's Brakes manufactures three different product lines, Model X, Model Y, and Model Z. Considerable market demand exists for all models. The following per unit data apply:

 

Model XModel YModel Z

Selling price$50$60$70

Direct materials666

Direct labor ($12 per hour)121224

Variable support costs ($4 per machine-hour)488

Fixed support costs101010

 

7) Which model has the greatest contribution margin per unit?

A) Model X

B) Model Y

C) Model Z

D) Both Model X and Model Y have the highest and same contribution margin per unit

 

8) Which model has the greatest contribution margin per machine-hour?

A) Model X

B) Model Y

C) Model Z

D) Both Model X and Model Y have the highest and same contribution margin per machine-hour

9) If there is excess capacity, which model is the most profitable to produce?

A) Model X

B) Model Y

C) Model Z

D) Both Model X and Model Y have same and highest profitability

 

10) If there is a machine breakdown, which model is the most profitable to produce?

A) Model X

B) Model Y

C) Model Z

D) Both Model X and Model Y have same and highest profitability

 

 

 

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