Use the following information to answer the question(s) below. Cerebro Manufactu

Question

Use the following information to answer the question(s) below. Cerebro Manufacturing produces four types of structural support fittings-plugs, rails, rivets, and clips-which are machined on two CNC machining centers. The machining centers have a capacity of 250,000 minutes per year. The gross margin per unit and machining requirements are shown in the spreadsheet below. Cerebro Manufacturing Model Machine Product Plugs Rails Rivets [Clips Capacity mins.lyear) $0.40 $1.20 0.80 1.10 Gross margin/unit Minutes/unit Gross margin/minute Maximum production Profit 250,000 6 What is the gross margin per minute of plugs manufactured? $0.73 $0.60 $0.27 $0.40

Explanation / Answer

Gross margin/minute = (Gross margin/unit) / (Minutes/unit)

For plugs, Gross margin/minute = 0.40/1 = $0.4

Answer: Option D

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