Question

(This information applies to questions 21-25) Rocky Top hardwal pemancluringsteetbars. The process starts with raw material (carbon steel wire), then progresses sequentially through five steps using machines A to E, respectively (see diagram below). This is the only use that the five machines are put to. The hourly throughput rates (in Ibs/hour) for each machine are provided in the diagram below. Step 1 Step 4 Raw Material Step 2 B Step 3 C Step 5 E Market Demand D A THr=90 THr=50 THr=60 THr=120 THr=100 If machine B in Step 2 works at full capacity, what is the maximum quantity of steel bars waiting to be processed by machine Cin Step 3 at the end of an 8-hour day (machines B and C are both working the same 8 hours)? 10 lbs 80 lbs Olbs 400 lbs 480 lbs

Answer 1

(a) Machine C will process 50 lbs of earlier process out of 60lbs hence 10 lbs will be maximum quantity processed by process C .

Hence answer is 10 lbs.

(b) When we add up all the outputs at different stages that will become 420 lbs as maximum output of steel production.

Hence answer is 420 lbs.

(c) Operating expenses will be including labor cost and other fixed costs including rent. Hence by summing up both $250,000+ $275,000

Total operating expenses will be $525,000.

Hence answer will be $525,000.

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