Question : 11) How can Lisa Dynondo encourage her salespeople to promote : 1211767

 

11) How can Lisa Dynondo encourage her salespeople to promote the more profitable model?

A) Put all sales persons on fixed salary.

B) Provide higher sales commissions for higher priced items.

C) Provide higher sales commissions for items with the greatest contribution margin per constrained resource.

D) Provide higher sales commissions for items which has the lowest cost and lower sales commissions for items with highest cost.

Answer the following questions using the information below:

 

Helmer’s Rockers manufactures two models, Standard and Premium. Weekly demand is estimated to be 100 units of the Standard Model and 70 units of the Premium Model. The following per unit data apply:

 

StandardPremium

Contribution margin per unit$18$20

Number of machine-hours required34

 

12) The contribution per machine-hour is ________.

A) $18 for Standard, $20 for Premium

B) $54 for Standard, $80 for Premium

C) $15 for Standard, $16 for Premium

D) $6 for Standard, $5 for Premium

 

13) If there are 496 machine-hours available per week, how many rockers of each model should Jim Helmer produce to maximize profits?

A) 100 units of Standard and 49 units of Premium

B) 72 units of Standard and 70 units of Premium

C) 100 units of Standard and 70 units of Premium

D) 85 units of Standard and 60 units of Premium

 

14) If there are 600 machine-hours available per week, how many rockers of each model should Jim Helmer produce to maximize profits?

A) 100 units of Standard and 49 units of Premium

B) 72 units of Standard and 70 units of Premium

C) 100 units of Standard and 70 units of Premium

D) 85 units of Standard and 60 units of Premium

Answer the following questions using the information below:

 

Aurum Appliances manufactures three sizes of kitchen appliances: small, medium, and large. Product information is provided below.

SmallMediumLarge

Unit selling price$400$600$1,200

Unit costs:

Variable manufacturing(220)(280)(500)

Fixed manufacturing(80)(130)(240)

Fixed selling and administrative(60)(75)(120)

Unit profit$ 40$ 115$340

 

Demand in units100120100

Machine-hours per unit2040100

 

The maximum machine-hours available are 6,000 per week.

 

15) What is the contribution margin per machine-hour for a medium appliance?

A) $1.15

B) $2.34

C) $6.13

D) $4.90

 

16) Which of the three product models should be produced first if management incorporates a short-run profit maximizing strategy?

A) small appliance

B) medium appliance

C) large appliance

D) both medium and large appliance

 

17) How many of each product should be produced per month using the short-run profit maximizing strategy?

SmallMediumLarge

A) 012012

B) 601200

C) 1001000

D) 1002040

18) Favata Corporation manufactures two products, AA and CC.  The following information was available:

AACC

Selling price per unit$37$26

Variable cost per unit3222

 

Total fixed costs$18,000

 

If Favata Corporation could produce and sell either 10,000 units of AA or 5,000 units of CC at full capacity, it should produce and sell ________.

A) 10,000 units of AA and none of CC

B) 3,000 units of CC and 6,000 units of AA

C) 5,000 units of CC and none of AA

D) 4,000 units of AA and 5,000 units of CC

 

19) Product-mix decisions usually have only a short-run focus because they typically arise in the context of capacity constraints that can be relaxed in the long run.

 

20) For short-run product-mix decisions, managers should focus on minimizing total fixed costs.