21) The contribution per machine-hour is A) $18 for Standard, $20

Question : 21) The contribution per machine-hour is A) $18 for Standard, $20 : 1837761

21) 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.

E) $5 for Standard, $6 for Premium.

22) 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 54 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

E) 100 units of Standard and 49 units of Premium

Answer the following question(s) using the information below.

Braun'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 labour ($12 per hour)121224

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

Fixed support costs101010

23) If there is excess capacity then which model is the most profitable to produce?

A) Model X

B) Model Y

C) Model Z

D) Models X and Y

E) Models X and Z

24) If capacity is constrained then which model is the most profitable to produce?

A) Model X

B) Model Y

C) Model Z

D) Models Y and Z

E) Models X and Z

25) The greatest possible contribution margin per unit of the constraining factor will ensure which of the following?

A) minimum total variable costs

B) zero imputed costs

C) minimum fixed cost per unit of production

D) minimum variable costs per unit of production

E) maximum operating income

26) Decisions on product mix involving multiple products, should be based on which of the following?

A) the variable cost differential between the products

B) the differential selling prices between the products

C) fixed cost savings

D) the amount of idle capacity

E) individual product contribution margin totals

27) Last year, a sailboard company produced two types of boards: a regular board for multi-purpose sailing; and, a special trick board used by experts for competitions. The regular board sells for $750 and the competition board sells for $1,350. The variable production costs are $250 and $400 respectively, and the company has $400,000 in fixed costs overall. Marketing staff have determined that the company should specialize in the competition boards only, and sell the regular boards, if at all, under a different brand name. Last year the company made a profit, selling twice as many regular boards as competition boards, resulting in a fixed cost allocation of $5.00 per board. It takes 6 hours of direct labour to make a regular board and 12 hours to make a competition board. The company worked at full capacity of 19,500 direct labour hours last year.

Based on the above information only, which product or mix of products, should the company choose? Assume that any and all production can be sold.

A) the regular board only, as it takes fewer direct labour hours to build

B) both, as the company made a profit last year using this strategy

C) the competition board only, as it has a higher contribution margin

D) Any combination is equivalent, based on the contribution margin times the number of boards that could be sold.

E) the regular board only, as it has the highest contribution margin per direct labour hour

28) A local accounting firm has offered to do all the billings and collections of a general practitioner. The annual fee will be $12,000. The service will replace the part-time bookkeeper who works for $12 an hour, 10 hours a week. Because outsourcing accounting activities will take place away from the office, the doctor estimates that she will have one additional hour a week to see patients. Normally she sees four patients an hour with an average visit fee of $100. The office is open 50 weeks a year. Since the computer service will maintain all records in its office, the doctor will no longer need to rent storage space for the office files. The storage space rents for $150 a month.

Required:Determine whether or not the doctor should accept the offer to use the computer service.

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