Q&A Hero

Q: Compute Aztec's departmental overhead rate for the baking department based on direct labor hours. A. $1.50 per DLH B. $5.00 per DLH C. $0.75 per DLH D. $0.50 per DLH E. $2.08 per DLH

Q: Compute Aztec's departmental overhead rate for the mixing department based on machine hours. A. $1.50 per MH. B. $5.00 per MH. C. $0.75 per MH. D. $0.50 per MH. E. $2.08 per MH.

Q: When using the stepping stone method for a minimization problem, the number of units that reallocates corresponds to the smallest number found in the cells containing minus signs.

Q: When using the stepping stone method, the closed path sometimes has the shape of a triangle as diagonal moves are permitted.

Q: Compute Aztec's departmental overhead rate for the mixing department based on direct labor hours. A. $1.50 per DLH. B. $5.00 per DLH. C. $0.75 per DLH. D. $0.50 per DLH. E. $2.08 per DLH.

Q: Degeneracy in a transportation problem is when no closed path exists for evaluating an unused cell.

Q: Crinkle Cut Clothes Company manufactures two products CC1 and CC2. Current direct material and direct labor costs are detailed below. Next year the company wishes to use a plantwide overhead rate with direct labor hours as its allocation base. Next year's overhead is estimated to be $338,250. The direct labor and direct materials costs are estimated to be consistent with the current year. Direct labor costs $28 per hour and the company expects to manufacture 22,000 units of CC1 and 91,000 units of CC2 next year. Direct Material per Unit Direct Labor Dollars per Unit CC1 $37.10 $22.40 CC2 $25.20 $15.40 Compute the plantwide overhead rate for next year. A. $28.00 per DLH. B. $37.80 per DLH. C. $1.35 per DLH. D. $5.00 per DLH. E. $.20 per DLH.

Q: In a transportation minimization problem, the negative improvement index associated with a cell indicates that reallocating units to that cell would lower costs.

Q: Kamper Company sells two products Big Z and Little Z. Current direct material and direct labor costs are detailed below. Next year, the company wishes to use a plantwide overhead rate with direct labor hours as its allocation base. Next year's overhead is estimated to be $475,000. The direct labor and direct materials costs are estimated to be consistent with the current year. Direct labor costs $20 per hour and the company expects to manufacture 32,000 units of Big Z and 9,000 units of Little Z next year. Direct Material per Unit Direct Labor Dollars per Unit Big Z $6 $17 Little Z $12 $8 What are total estimated direct labor hours for this next year? A. 30,800 total DLH. B. 616,000 total DLH. C. 300,000 total DLH. D. 1,025,000 total DLH. E. 916,000 total DLH.

Q: When using the stepping-stone method, the improvement index for an unused cell equals the shipping cost associated with that cell.

Q: Bond Company uses a plantwide overhead rate with direct labor hours as the allocation base. Use the following information to solve for the amount of direct labor hours estimated per unit of product G2. Direct material cost per unit of G2 $7 Total estimated manufacturing overhead $787,500 Total cost per unit of G2 $22 Total estimated direct labor hours 450,000 DLH Direct labor cost per unit of G2 $4.25 A. 1.75 DLH per unit of G2. B. 6.14 DLH per unit of G2. C. 9.3 DLH per unit of G2. D. .66 DLH per unit of G2. E. 11.25 DLH per unit of G2.

Q: A feasible solution in transportation models is one in which all of the supply and demand constraints are satisfied.

Q: Gold Company uses a plantwide overhead rate with machine hours as the allocation base. Use the following information to solve for the amount of machine hours estimated per unit of product RST. Direct material cost per unit of RST $15 Total estimated manufacturing overhead $300,000 Total cost per unit of RST $80 Total estimated machine hours 150,000 MH Direct labor cost per unit of RST $23 A. 21 MH per unit of RST. B. 2 MH per unit of RST. C. 20 MH per unit of RST. D. 37.5 MH per unit of RST. E. 38 MH per unit of RST.

Q: The stepping-stone method frequently achieves an optimal solution as soon as it calculates an initial feasible solution.

Q: The intuitive method of generating an initial solution has different results for each problem solver because "intuition" varies from person to person.

Q: Gray Company uses a plantwide overhead rate with machine hours as the allocation base. Use the following information to solve for the amount of machine hours estimated per unit of product Q. Direct material cost per unit of Q $15 Total estimated manufacturing overhead $100,000 Total cost per unit of Q $60 Total estimated machine hours 200,000 MH Direct labor cost per unit of Q $30 A. 50 MH per unit of Q. B. .50 MH per unit of Q. C. .75 MH per unit of Q. D. 17.5 MH per unit of Q. E. 30 MH per unit of Q.

Q: A company allocates $7.50 overhead to each unit produced. The company uses a plantwide overhead rate with direct labor hours as the allocation base. Given the amounts below, how many direct labor hours does the company expect in department 2? Estimated: Department 1 Department 2 Manufacturing overhead costs $74,358 $49,572 Direct labor hours 6,610 DLH ? DLH Machine hours 700 MH 800 MH A. 9,914 DLH B. 6,612 DLH C. 3,109 DLH D. 7,454 DLH E. 16,254 DLH

Q: Neither the northwest corner rule nor the intuitive method considers shipping cost in making initial allocations.

Q: A transportation problem requires exactly as many origins as destinations.

Q: Western Company allocates $10.00 overhead to each unit produced. The company uses a plantwide overhead rate with machine hours as the allocation base. Given the amounts below, how many machine hours does the company expect in department 2? Estimated: Department 1 Department 2 Manufacturing overhead costs $250,000 $150,000 Direct labor hours 8,000 DLH 12,000 DLH Machine hours 15,000 MH ? MH A. 33,000 MH B. 137,500 MH C. 82,500 MH D. 88,000 MH E. 25,000 MH

Q: The transportation model is a special class of linear programming models.

Q: Red Raider Company uses a plantwide overhead rate with direct labor hours as the allocation base. Next year, 400,000 units are expected to be produced taking .90 direct-labor hours each. How much overhead will be assigned to each unit produced given the following estimated amounts? Estimated: Department 1 Department 2 Manufacturing overhead costs $2,530,000 $900,000 Direct labor hours 168,000 DLH 110,000 DLH Machine hours 30,000 MH 8,000 MH A. $63.95 per unit B. $11.11 per unit C. $15.06 per unit D. $7.32 per unit E. $12.34 per unit

Q: The transportation model seeks satisfactory, but not necessarily optimal, solutions for shipping goods from several origins to several destinations.

Q: Lake Erie Company uses a plantwide overhead rate with machine hours as the allocation base. Next year, 600,000 units are expected to be produced taking .75 machine hours each. How much overhead will be assigned to each unit produced given the following estimated amounts? Estimated: Department 1 Department 2 Manufacturing overhead costs $3,107,500 $1,520,000 Direct labor hours 150,000 DLH 250,000 DLH Machine hours 250,000 MH 175,000 MH A. $11.57 per unit B. $8.17 per unit C. $5.61 per unit D. $12.43 per unit E. $10.89 per unit

Q: The following data relates to Patterson Company's estimated amounts for next year. Estimated: Department 1 Department 2 Manufacturing overhead costs $50,000 $60,000 Direct labor hours 180,000 DLH 200,000 DLH Machine hours 200,000 MH 400,000 MH What is the company's plantwide overhead rate if direct labor hours are the allocation base? (Round to two decimal places.) A. $3.45 per DLH B. $5.45 per DLH C. $0.29 per DLH D. $0.26 per DLHE. $0.20 per DLH

Q: The transportation model is an excellent tool for minimizing shipping costs among existing facilities, but it is not useful when firms consider new facility locations.

Q: Operations Management, 10e (Heizer/Render) Module C Transportation Models True/False

Q: The following data relates to Black-Out Company's estimated amounts for next year. Estimated: Department 1 Department 2 Manufacturing overhead costs $300,000 $400,000 Direct labor hours 60,000 DLH 80,000 DLH Machine hours 1,000 MH 2,000 MH What is the company's plantwide overhead rate if machine hours are the allocation base? (Round to two decimal places.) A. $233.33 per MH B. $150.00 per MH C. $100.00 per MH D. $4.90 per MH E. $5.00 per MH

Q: The following data relates to Spurrier Company's estimated amounts for next year. Estimated: Department 1 Department 2 Manufacturing overhead costs $1,100,000 $3,300,000 Direct labor hours 540,000 DLH 790,000 DLH Machine hours 90,000 MH 24,000 MH What is the company's plantwide overhead rate if direct labor hours are the allocation base? (Round to two decimal places) A. $3.31 per direct labor hour. B. $3.43 per direct labor hour. C. $2.04 per direct labor hour. D. $.30 per direct labor hour. E. $.50 per direct labor hour.

Q: A feedlot is trying to decide on the lowest cost mix that will still provide adequate nutrition for its cattle. Suppose that the numbers in the chart represent the number of grams of ingredient per 100 grams of feed and that the cost of Feed X is $5/100grams, Feed Y is $3/100grams, and Feed X is $8/100 grams. Each cow will need 50 grams of A per day, 20 grams of B, 30 grams of C, and 10 grams of D. If the feedlot can get no more than 200 grams per day per cow of any of the feed types determine the constraints governing the problem. Ingredient X Y Z A 10 15 5 B 30 10 20 C 40 0 20 D 0 20 30 Answer: Objective: Minimize cost = 5X+3Y+8Z where X,Y,Z are in grams and cost is in cents Subject to: A requirement: .1X+.15Y+.05Z u2265 50 B requirement: .3X + .1Y + .2Z u2265 20 C requirement: .4X + .2Z u2265 30 D requirement: .2Y+.3Z u226510 Purchase limit: Xu2264200 Purchase limit: Yu2264200 Purchase limit: Zu2264200 Where X,Y, and Z are in grams 22) Suppose that a constraint is given by X+Yu226410. If another constraint is given to be 3X+2Yu226515 determine the corners of the feasible solution. If the profit from X is 5 and the profit from Y is 10, determine the maximum profit. Answer: Corners are (10,0), (5,0), (0,7.5), and (0,10). Maximum profit is at the corner (0,10), which yields $100 of profit.

Q: A company estimates that overhead costs for the next year will be $8,320,000 for indirect labor and $155,500 for factory utilities. The company uses machine hours as its overhead allocation base. If 400,000 machine hours are planned for this next year, what is the company's plantwide overhead rate? (Round to two decimal places) A. $0.05 per machine hour. B. $ 21.19 per machine hour. C. $ 20.80 per machine hour. D. $0.39 per machine hour. E. $2.57 per machine hour.

Q: Suppose an LP problem was subject to constraints of 2X+Y> 10 X+3Y> 20 Suppose that a new constraint is added, of the form 3X+A*Y> 90. What is the largest value that A can have so that this new constraint is redundant?

Q: Suppose that a constraint for assembly time has a shadow price of $50/hour for 15 hours in either direction and that all available assembly time is currently used (would require overtime to do more). If the salary of workers is $30 and they receive 50% extra pay for overtime what should management do?

Q: Peterson Company estimates that overhead costs for the next year will be $6,520,000 for indirect labor and $550,000 for factory utilities. The company uses machine hours as its overhead allocation base. If 140,000 machine hours are planned for this next year, what is the company's plantwide overhead rate? A. $.02147 per machine hour. B. $50.50 per machine hour. C. $45.75 per machine hour. D. $3.9286 per machine hour. E. $.2545 per machine hour.

Q: K Company estimates that overhead costs for the next year will be $2,900,000 for indirect labor and $800,000 for factory utilities. The company uses direct labor hours as its overhead allocation base. If 80,000 direct labor hours are planned for this next year, what is the company's plantwide overhead rate? A. $.02 per direct labor hour. B. $46.25 per direct labor hour. C. $36.25 per direct labor hour. D. $10 per direct labor hour. E. $.10 per direct labor hour.

Q: Suppose that a chemical manufacturer is deciding how to mix two chemicals, A and B. A costs $5/gram and B costs $4/gram if they are ordered above the current supply level. There are currently 40 grams of A and 30 grams of B that must be used in the mix or they will expire. If a customer wants 1 kg of the mix with at least 40% A but no more than 55% A, how many grams of each chemical should be included in the mix?

Q: What are the main advantages of traditional volume-based allocation methods compared to activity-based costing? A. Traditional volume-based methods are easier to use and less costly to implement and maintain. B. Traditional volume-based methods are more accurate and allowed by GAAP. C. Traditional volume-based methods are less accurate and easier to use. D. Traditional volume-based methods are harder to use and more costly to implement and maintain. E. There are no advantages to using traditional volume-based methods.

Q: Lost Maples Winery makes three varieties of contemporary Texas Hill Country wines: Austin Formation (a fine red), Ste. Genevieve (a table white), and Los Alamos (a hearty pink Zinfandel). The raw materials, labor, and contribution per case of each of these wines is summarized below. Grapes Variety A bushels Grapes Variety B bushels Sugar pounds Labor (man-hours) Contrib. per case Austin Formation 4 0 1 3 $24 Ste. Genevieve 0 4 0 1 $28 Los Alamos 2 2 2 2 $20 The winery has 2800 bushels of Variety A grapes, 2040 bushels of Variety B grapes, 800 pounds of sugar, and 1060 man-hours of labor available during the next week. The firm operates to achieve maximum contribution. Refer to the POM for Windows panels showing the solution to this problem. Answer the following questions. a. For maximum contribution, how much of each wine should be produced? b. How much contribution will be made by selling the output? c. Is there any sugar left over? If so, how much? If not, what is its shadow price (dual value)? Explain what this value means to Lost Maples' management. d. Interpret the meaning of the lower bound to Labor in the Ranging analysis. That is, explain how the solution would change if the amount of labor fell below that lower value. e. Interpret the meaning of the upper bound to Los Alamos wine in the Ranging analysis.

Q: South Coast Papers wants to mix two lubricating oils (A and B) for its machines in order to minimize cost. It needs no less than 3,000 gallons in order to run its machines during the next month. It has a maximum oil storage capacity of 4,000 gallons. There are 2,000 gallons of Oil A and 4,000 of Oil B available. The mixed fuel must have a viscosity rating of no less than 40. When mixing fuels, the amount of oil obtained is exactly equal to the sum of the amounts put in. The viscosity rating is the weighted average of the individual viscosities, weighted in proportion to their volumes. The following is known: Oil A has a viscosity of 45 and costs 60 cents per gallon; Oil B has a viscosity of 37.5 and costs 40 cents per gallon. State the objective and the constraints of this problem. Plot all constraints and highlight the feasible region. Use your (by now, well-developed) intuition to suggest a feasible (but not necessarily optimal) solution. Be certain to show that your solution meets all constraints.

Q: What are three advantages of activity-based costing over traditional volume-based allocation methods? A. Ease of use, more accurate product costing, and more effective cost control. B. Fewer allocation bases, ease of use, and a direct correlation to production volume. C. More accurate product costing, more effective cost control, and better focus on the relevant factors for decision making. D. More accurate product costing, fewer cost objects, and a direct correlation to production volume. E. More accurate product costing, ease of use, less costly to implement.

Q: Rienzi Farms grows sugar cane and soybeans on its 500 acres of land. An acre of soybeans brings a $1000 contribution to overhead and profit; an acre of sugar cane has a contribution of $2000. Because of a government program no more than 200 acres may be planted in soybeans. During the planting season 1200 hours of planting time will be available. Each acre of soybeans requires 2 hours, while each acre of sugar cane requires 5 hours. The company seeks maximum contribution (profit) from its planting decision. a. Algebraically state the decision variables, objective and constraints. b. Plot the constraints c. Solve graphically, using the corner-point method.

Q: Which of the following is not true? A. The departmental overhead method assigns overhead on the basis of volume-related measures. B. The departmental overhead rate method is more refined than the plantwide overhead rate method. C. Overhead costing accuracy is improved by the use of multiple departmental rates rather than a single overhead rate. D. The departmental overhead rate method does not assign overhead on the basis of volume-related measures. E. The departmental overhead rate method is more costly to implement than the traditional overhead rate method.

Q: A stereo mail order center has 8,000 cubic feet available for storage of its private label loudspeakers. The ZAR-3 speakers cost $295 each and require 4 cubic feet of space; the ZAR-2ax speakers cost $110 each and require 3 cubic feet of space; and the ZAR-4 model costs $58 and requires 1 cubic foot of space. The demand for the ZAR-3 is at most 20 units per month. The wholesaler has $100,000 to spend on loudspeakers this month. Each ZAR-3 contributes $105, each ZAR-2ax contributes $50, and each ZAR-4 contributes $28. The objective is to maximize total contribution. Write out the objective and the constraints.

Q: Which of the following is a disadvantage of the departmental overhead rate method? A. The departmental overhead rate method assigns overhead on the basis of volume-related measures. B. The departmental overhead rate method is more refined than the plantwide overhead rate method. C. The departmental overhead rate method does not assign overhead on the basis of volume-related measures. D. The departmental overhead rate method is simpler and less costly to implement than the plantwide rate method. E. There are no disadvantages of the departmental overhead rate method.

Q: The QueenCity Nursery manufactures bags of potting soil from compost and topsoil. Each cubic foot of compost costs 12 cents and contains 4 pounds of sand, 3 pounds of clay, and 5 pounds of humus. Each cubic foot of topsoil costs 20 cents and contains 3 pounds of sand, 6 pounds of clay, and 12 pounds of humus. Each bag of potting soil must contain at least 12 pounds of sand, 12 pounds of clay, and 10 pounds of humus. Explain how this problem meets the conditions of a linear programming problem. Plot the constraints and identify the feasible region. Graphically or with corner points find the best combination of compost and topsoil that meets the stated conditions at the lowest cost per bag. Identify the lowest cost possible.

Q: Which of the following is true? A. Overhead costs are often affected by many issues and are frequently too complex to be explained by any one factor. B. The departmental overhead rate is not usually based on measures closely related to production volume. C. The departmental overhead rate is most accurate in assigning overhead costs that are not driven by production volume. D. Allocated overhead costs will be the same no matter which allocation method is used. E. When cost analysts are able to logically trace cost objects to costs, costing accuracy is improved.

Q: The property manager of a city government issues chairs, desks, and other office furniture to city buildings from a centralized distribution center. Like most government agencies, it operates to minimize its costs of operations. In this distribution center, there are two types of standard office chairs, Model A and Model B. Model A is considerably heavier than Model B, and costs $20 per chair to transport to any city building; each model B costs $14 to transport. The distribution center has on hand 400 chairs200 each of A and B. The requirements for shipments to each of the city's buildings are as follows: Building 1 needs at least 100 of A Building 2 needs at least 150 of B. Building 3 needs at least 100 chairs, but they can be of either type, mixed. Building 4 needs 40 chairs, but at least as many B as A. Write out the objective function and the constraints for this problem. (Hint: there are eight variableschairs for building 1 cannot be used to satisfy the demands for another building).

Q: Which of the following companies would be best served by a plantwide overhead rate? A. A company that manufactures many different products and whose operations are an equal mix of labor and mechanized work. B. A company that manufactures few products and whose operations are labor intensive. C. A company that manufactures many different products and whose operations are highly mechanized. D. A company whose products use overhead resources in very different ways. E. A company whose products differ in batch size and complexity and consume different amounts of overhead resources.

Q: A craftsman builds two kinds of birdhouses, one for wrens (X1), and one for bluebirds (X2). Each wren birdhouse takes four hours of labor and four units of lumber. Each bluebird house requires two hours of labor and twelve units of lumber. The craftsman has available 60 hours of labor and 120 units of lumber. Wren houses profit $6 each and bluebird houses profit $15 each. Use the software output that follows to interpret the problem solution. Include a statement of the solution quantities (how many of which product), a statement of the maximum profit achieved by your product mix, and a statement of "resources unused" and "shadow prices." Answer: The optimal solution is X1 = 12, X2 = 6, which earns a profit of 12 * 6 + 6 * 15 = $162. Both labor and lumber are used up, so there are no resources unused. Additional labor is worth $0.30 per hour, and additional lumber is worth $1.20 per unit. 11) The objective of a linear programming problem is to maximize 1.50A + 1.50B, subject to 3A + 2B u2264 600, 2A + 4B u2264 600, and 1A + 3B u2264 420. a. Plot the constraints on the grid below c. Identify the feasible region and its corner points. Show your work. d. What is the optimal product mix for this problem? Answer: The objective of the problem is to maximize 1.50A + 1.50B, The constraints are 3A + 2B u2264 600, 2A + 4B u2264 600, and 1A + 3B u2264 420. The plot and feasible region appear in the graph below. The corner points are (0, 0), (200, 0), (0, 140), and (150, 75). The first three points can be read from the graph axes. The last corner point is the intersection of the equality 2A + 4B = 600 and 3A + 2B = 600. Multiply the first equality by and subtract from the second, leaving 2A = 300 or A = 150. Substituting A = 150 in either equality yields B = 75, which is the optimal product mix for 337.50.

Q: Which of the following are advantages of using the plantwide overhead rate method? A. The use of cost pools is considerably more accurate than other overhead allocations. B. The necessary information is readily available. C. It is more accurate than traditional overhead allocations. D. Each department has its own overhead rate and its own allocation base. E. It takes into account that when products differ in batch size and complexity, they usually consume different amounts of overhead resources.

Q: A manager must decide on the mix of products to produce for the coming week. Product A requires three minutes per unit for molding, two minutes per unit for painting, and one minute for packing. Product B requires two minutes per unit for molding, four minutes for painting, and three minutes per unit for packing. There will be 600 minutes available for molding, 600 minutes for painting, and 420 minutes for packing. Both products have contributions of $1.50 per unit. a. Algebraically state the objective and constraints of this problem. b. Plot the constraints on the grid below and identify the feasible region.

Q: What is the reason for pooling costs? A. To shift costs from low-volume to high-volume products. B. It is a budgeting technique designed to accurately track fixed costs. C. Determining a pool rate for all costs incurred by the same activity reduces the number of cost assignments required. D. This procedure helps to determine which costs are directly related to production volume. E. It simplifies departmental overhead costing procedures.

Q: Phil Bert's Nuthouse is preparing a new product, a blend of mixed nuts. The product must be at most 50 percent peanuts, must have more almonds than cashews, and must be at least 10 percent pecans. The blend will be sold in one-pound bags. Phil's goal is to mix the nuts in such a manner that all conditions are satisfied and the cost per bag is minimized. Peanuts cost $1 per pound. Cashews cost $3 per pound. Almonds cost $5 per pound and pecans cost $6 per pound. Identify the decision variables of this problem. Write out the objective and the set of constraints for the problem. Do not solve.

Q: Which of the following statements is true with regard to activity-based costing rates? A. The premise of ABC is that activities are what cause costs to be incurred. B. ABC is another way to refer to a multiple departmental rate situation. C. There one basic stage to ABC. D. ABC is simpler and less expensive to implement than other traditional methods of allocating overhead costs. E. All cost drivers used to determine the rates will be unit-level drivers.

Q: John's Locomotive Works manufactures a model locomotive. It comes in two versions--a standard (X1), and a deluxe (X2). The standard version generates $250 per locomotive for the standard version, and $350 per locomotive for the deluxe version. One constraint on John's production is labor hours. He only has 40 hours per week for assembly. The standard version requires 250 minutes each, while the deluxe requires 350 minutes. John's milling machine is also a limitation. There are only 20 hours a week available for the milling machine. The standard unit requires 60 minutes, while the deluxe requires 120. Formulate as a linear programming problem, and solve using either the graphical or corner points solution method.

Q: From an ABC perspective, what causes costs to be incurred? A. Financial transactions. B. The volume of units produced. C. Debits and credits. D. Management decisions. E. Activities.

Q: A manager must decide on the mix of products to produce for the coming week. Product A requires three minutes per unit for molding, two minutes per unit for painting, and one minute for packing. Product B requires two minutes per unit for molding, four minutes for painting, and three minutes per unit for packing. There will be 600 minutes available for molding, 600 minutes for painting, and 420 minutes for packing. Both products have contributions of $1.50 per unit. Answer the following questions; base your work on the solution panel provided. A B RHS Dual Maximize 1.5 1.5 Molding 3. 2. u21d0 600. 0.375 Painting 2. 4. u21d0 600. 0.1875 Packing 1. 3. u21d0 420. 0. Solution ---> 150. 75. 337.5 a. What combination of A and B will maximize contribution? b. What is the maximum possible contribution? c. Are any resources not fully used up? Explain.

Q: The cost object(s) of the activity-based costing method is(are): A. The unit of product. B. The production departments of the company. C. The production activities of the company. D. The production activities in the first stage and the unit of product in the second stage. E. The unit of product in the first stage and the production activities in the second stage.

Q: A financial advisor is about to build an investment portfolio for a client who has $100,000 to invest. The four investments available are A, B, C, and D. Investment A will earn 4 percent and has a risk of two "points" per $1,000 invested. B earns 6 percent with 3 risk points; C earns 9 percent with 7 risk points; and D earns 11 percent with a risk of 8. The client has put the following conditions on the investments: A is to be no more than one-half of the total invested. A cannot be less than 20 percent of the total investment. D cannot be less than C. Total risk points must be at or below 1,000.Identify the decision variables of this problem. Write out the objective function and constraints. Do not solve.

Q: Which of the following statements is true with regard to the departmental overhead rate method? A. It is logical to use this method when overhead resources are consumed by various products in substantially the same way throughout multiple departments. B. It is logical to use this method when overhead resources are consumed by various products in substantially different ways throughout multiple departments. C. Each department has the same rate for the same activity pool. D. It requires one overhead cost pool and one rate. E. It is synonymous with activity-based costing.

Q: Tom is a habitual shopper at garage sales. Last Saturday he stopped at one where there were several types of used building materials for sale. At the low prices being asked, Tom knew that he could resell the items in another town for a substantial gain. Four things stood in his way: he could only make one round trip to resell the goods; his pickup truck bed would hold only 1000 pounds; the pickup truck bed could hold at most 70 cubic feet of merchandise; and he had only $200 cash with him. He wants to load his truck with the mix of materials that will yield the greatest profit when he resells them. Item Cubic feet per unit Price per unit Weight per unit Can resell for 2 x 4 studs 1 $0.10 5 pounds $0.80 4 x 8 plywood 3 $0.50 20 pounds $3.00 Concrete blocks 0.5 $0.25 10 pounds $0.75 State the decision variables (give them labels). State the objective function. Formulate the constraints of this problem. DO NOT SOLVE, but speculate on what might be a good solution for Tom. You must supply a set of quantities for the decision variables. Provide a sentence or two of support for your choice.

Q: The cost object(s) of the departmental overhead rate method is: A. The unit of product. B. The production departments of the company. C. The production departments in the first stage and the unit of product in the second stage. D. The unit of product in the first stage and the production departments in the second stage. E. The production activities of the company.

Q: A linear programming problem contains a restriction that reads "the quantity of S must be no more than one-fourth as large as T and U combined." Formulate this as a constraint ready for use in problem solving software.

Q: Which of the following statements is true with regard to the plantwide overhead rate method? A. The rate is determined using volume-related measures. B. It is logical to use this method when overhead costs are not closely tied to volume-related measures. C. This method uses multiple overhead rates. D. The rate is determined using measures that are not closely related to volume. E. The method provides the most accurate means of allocating overhead costs.

Q: A linear programming problem contains a restriction that reads "the quantity of Q must be at least as large as the sum of R, S, and T." Formulate this as a constraint ready for use in problem solving software.

Q: The cost object of the plantwide overhead rate method is: A. The unit of product. B. The production departments of the company. C. The production activities of the company. D. Manufacturing cost pools. E. the time period.

Q: A linear programming problem contains a restriction that reads "the quantity of X must be at least twice as large as the quantity of Y." Formulate this as a constraint ready for use in problem solving software.

Q: Overhead costs: A. Are directly related to production. B. Can be traced to units of product in the same way that direct materials can. C. Cannot be traced to units of product in the same way that direct labor can. D. Are period costs. E. Include only fixed costs.

Q: Explain how to use the iso-profit line in a graphical maximization problem.

Q: Which of the following would not be considered a product cost? A. Direct labor costs. B. Factory supervisor's salary. C. Factory line worker's salary. D. Cost accountant's salary. E. Manufacturing overhead costs.

Q: What is the simplex method?

Q: Which types of overhead allocation methods result in the use of more than one overhead rate during the same time period? A. Plantwide overhead rate method and departmental overhead rate method. B. Cost pool overhead rate method and plantwide overhead rate method. C. Departmental overhead rate method and activity-based costing. D. Activity-based costing and plantwide overhead rate method. E. Departmental overhead rate method and cost pool overhead rate method.

Q: What is sensitivity analysis?

Q: A method of assigning overhead costs to a product using a single overhead rate is: A. Plantwide overhead rate method. B. Cost pool overhead rate method. C. Departmental overhead rate method. D. Activity-based costing. E. Overhead cost allocation method.

Q: What is the usefulness of a shadow price (or dual value)?

Q: Two big benefits of ABC costing are a) more accurate product cost information and b) more detailed information on costs and the drivers of those costs.

Q: What are corner points? What is their relevance to solving linear programming problems?

Q: Plantwide overhead rates typically do a better job of matching each department's overhead costs to the products using the department's resources than do departmental overhead rates.

Q: What is the feasible region in a linear programming problem?

Q: A quality-inspection cost is an example of unit-level costs.