Exam 11: Decision Making With a Strategic Emphasis

Lester-Smith Company manufactures three wood construction components: wood trusses,wood floor joists,and beams.The plant is operating at full capacity.It can produce 200 trusses,1,000 joists,and 600 beams per month and sells everything it produces.The monthly revenues and expenses for the three products are

Kingston Company,which needs 10,000 units of a certain part to be used in its production cycle,can make or buy the part.If Kingston buys the part from Utica Company,Kingston could not use the released facilities in another manufacturing activity within the coming year.60% of the fixed overhead applied will continue regardless of which decision is made.The following information is available: Cost to Kingston to make the part: In deciding whether to make or buy the part,Kingston's total relevant costs to make the part are:

The Car Lot is a New York car dealership located in a highly visible area along a prominent highway.Fred Barns,owner of The Car Lot,was deciding how much front-row space along the highway to devote to four different car models.Fred had a maximum front-row space of 200 feet to devote to the four car models.He wanted a minimum of twenty feet and a maximum of eighty feet of front-row space for each car model.Appropriate data on the four car models follow: The SUV model's monthly contribution per 10 feet of front-row space is calculated to be