When a company faces a production constraint or scarce resource such as having only a certain amount of machine hours available for production activities, it is important to a. b. produce the product that has the highest contribution margin. produce the product with the lowest full manufacturing cost.

C. produce the products which yield the highest contribution margin per unit of scarce resource. produce the products that yield the lowest variable manufacturing cost.

e.

Scarce constraints are not relevant issues in determining the production mix of products.

Sorenson Company plans to sell 35,000 units during the month of April. The company plans to have 2,500 units on hand at the end of the month. If 1,600 units are on hand on May 1, how many units must be produced during April?

a.

35,000

b.

37,500

C. d.

32,300

35,900

e.

None of the answers above is correct.

Pane Company manufactures controls that are used in its manufacturing of air conditioners. The controls can be purchased from another firm for $35 each. The controls cost Payne $40 per unit to produce, of which 15 percent is allocated fixed overhead cost. To analyze a make/buy decision for these controls, the relevant cost comparison is $40 and $35, and the controls should be purchased.

$40 and $35, and the controls should be manufactured.

$35 and $34, and the controls should be purchased.

$35 and $34, and the controls should be manufactured.

None of the answers above is correct.

A "Customer Profitability Analysis" refers to the process of determining Which of our customers are earning a solid profit and therefore will be able to pay their invoices on a timely basis?

Which divisions of our company are earning the most profit?

Which of our customers are providing our firm the most profit or loss?

What can we do to ensure that our customers earn an acceptable profit?

None of the answers above is correct.

The process of involving managers at all levels in the organization in preparing the master budget for the year is called participative budgeting.

profit planning. common sense.

control budgeting downsizing.