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Always Rain Irrigation, Inc., would like to determine capacity requirements for the next four years. Currently two production lines are I place for making bronze and plastic sprinklers. Three types of sprinklers are available in both bronze and plastic: 90-degree nozzle sprinklers, 180-degree nozzle sprinklers and 360-degree sprinklers. Management has forecast demand for the next four years as follows.
YEARLY DEMAND 1 (IN 000s) 2 (IN 000s) 3(IN 000s) 4(IN 000s) Plastic 90 32 44 55 56 Plastic 180 15 16 17 18 Plastic 360 50 55 64 67 Bronze 90 7 8 9 10 Bronze 180 3 4 5 6 Bronze 360 11 12 15 18
Both production lines can produce all the different types of nozzles. The bronze machines needed for the Bronze sprinklers require two operators and can produce up to 12,000 sprinklers. The plastic injection moulding machine needed for the plastic sprinklers requires four operators and can produce up to 200,00 sprinklers. Three bronze achiness and only one injection moulding machine are available. What are the capacity requirements for the next four years?
Which of the following statements regarding service companies and activity-based costing (ABC) is true?
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