Question : 41. Mountaineer ProductsMountaineer Products manufactures two types of tents: single-wall and : 1291725

 

41. Mountaineer ProductsMountaineer Products manufactures two types of tents: single-wall and double-wall. Selected data related to each type of tent is as follows: 

 

Single-wall

 

Double-wall

Sales price

$250

 

$375

Direct materials

25

 

50

Direct labor

20

 

40

Variable overhead

10

 

15

Machine hours

2

 

3

 

 

 

 

Total fixed overhead is $150,000. Most of the manufacturing process is done on specialized machines. For the upcoming year, there is a maximum of 9,000 machine hours available. Management believes there is sufficient demand for 3,000 single-wall and 4,000 double-wall tents each year. Refer to the Mountaineer Products information above. In order to maximize profits, how many of each type of tent should be produced? A. Single-wall: 3,000     Double-wall: 1,000B. Single-wall:        0     Double-wall: 3,000C. Single-wall: 1,800     Double-wall: 1,800D. Single-wall: 1,500     Double-wall: 4,000

 

42. Mountaineer ProductsMountaineer Products manufactures two types of tents: single-wall and double-wall. Selected data related to each type of tent is as follows: 

 

Single-wall

 

Double-wall

Sales price

$250

 

$375

Direct materials

25

 

50

Direct labor

20

 

40

Variable overhead

10

 

15

Machine hours

2

 

3

 

 

 

 

Total fixed overhead is $150,000. Most of the manufacturing process is done on specialized machines. For the upcoming year, there is a maximum of 9,000 machine hours available. Management believes there is sufficient demand for 3,000 single-wall and 4,000 double-wall tents each year. Refer to the Mountaineer Products information above. If the company produces in order to maximize its profits, what would be the contribution margin for the upcoming year? A. $232,500B. $382,500C. $705,000D. $855,000

 

43. Tilton Food Warehouse Club sells food and other items in bulk to its members. Tilton is very selective in the products it sells because of limited shelf space. It has been asked by a canned vegetables manufacturer to consider adding three of its canned food items. The following information is available regarding each of the possible canned food items: 

 

Item #1

 

Item #2

 

Item #3

Sales price per unit

$3.50

 

$4.50

 

$7.00

Cost to purchase

1.25

 

2.00

 

3.00

 

 

 

 

 

 

Units per foot of shelf space

3

 

2

 

1

 

 

 

 

 

 

Assuming that there is unlimited demand for all items, if Tilton has 15 feet of shelf space available, which of the following statements is true if they wish to maximize profits? A. Tilton should sell only item #1.B. Tilton should sell only item #2.C. Tilton should sell only item #3.D. Tilton should sell an equal amount of each item.

 

44. If a company is faced with a limited resource, which of the following is not a feasible option for alleviating the constraint? A. Focusing on products that require less use of the resource.B. Increasing the capacity of the limited resource.C. Reducing the use of the resource in production.D. Increasing the capacity of an underutilized resource.

 

45. The theory of constraints: A. is a management tool used to determine whether or not a company should accept a special order.B. helps in identifying the bottlenecks in a production process.C. helps in estimating the fixed overhead costs in a production process.D. is a management tool used for deciding whether a product should be sold “as is” or processed further.

 

46. Which of the following is most likely to represent a bottleneck? A. A production machine that is underutilized.B. A workstation that requires significant supervision.C. A production machine that has limited capacity.D. An employee who has one hour of idle time each day.

 

47. In the production process, bottlenecks: A. maximize profits.B. maximize the use of scarce resources.C. limit throughput.D. minimize the total cost of a product.

 

48. In deciding whether to sell a product or to process it further, which of the following pieces of information would not be relevant to the decision? A. Costs of further processing.B. Costs incurred up to the decision point.C. Sales price if processed further.D. Customer demand with further processing.

 

49. In deciding whether to sell a product or to process it further, which of the following costs are relevant to the decision? A. Material costs incurred up to the decision point.B. Costs incurred to process further.C. Overhead costs incurred up to the decision point.D. Direct materials and direct labor costs only.

 

50. In a sell or process further decision, if the incremental revenue of additional processing is greater than the incremental cost of additional processing, then: A. it is less profitable to process further.B. it is more profitable to process further.C. total fixed costs have increased.D. total product costs have decreased.