1)A reason for the importance of capacity decisions is that capacity: Is the sam
ID: 433946 • Letter: 1
Question
1)A reason for the importance of capacity decisions is that capacity:
Is the same as job enlargement
Should include more authority
Is a concept that was promoted by Adam Smith
includes all of the above
2)An alternative will have fixed costs of $10,000 per month, variable costs of $50 per unit, and revenue of $70 per unit. The break-even point volume is:
100
500
1000
d.2000
3)nearness to raw materials would be most important to a
Manufacturer
clothing store
post office
tax preparation service
4)A decision tree is :
A behavioral representation of alternatives
A matrix representation of alternatives
A schematic representation of alternatives
Limited to a maximum of 12 branches
a.Is the same as job enlargement
b.Should include more authority
c.Is a concept that was promoted by Adam Smith
d.includes all of the above
Explanation / Answer
1.
Wrong alternatives are given.
The correct alternatives are about ability to limit the capacity, affecting operating cost and long term commitment. Here, the alternative D (all the above ) is correct.
2.
B
Working note:
Breakeven point = Fixed cost / (price per unit – variable cost per unit) = 10000/(70-50) = 500 units
3.
A
It will help the manufacturer to acquire to raw material quickly and at lower cost.
4.
C
It is a schematic representation that helps the managers to analyze and make informed decisions.
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