Use the following information to answer Questions 7, 8 and 9
A company that produces diet supplements that uses a highly automated packaging process has the following production and revenue alternatives for three products A, B, and C) that are feasible to produce with existing plant and equipment. Total revenue is in thousands of dollars per month. Total cost for the first shift is $200,000 per month - of which $120,000 is labor, $60,000 is other variable costs, and $20,000 is fixed cost. As the number of shifts is increased, fixed cost remains at $20,000 per month while variable costs other than labor remain the same per shift. For the second shift, labor must be paid 1.2 times the amount paid on the first shift. For the third shift, labor must be paid 1.4 times what it receives in the first shift.
-What is the total monthly cost if the firm uses two shifts?
A) $144,000
B) $200,000
C) $240,000
D) $344,000
E) $404,000

Question

Use the following information to answer Questions 7, 8 and 9
A company that produces diet supplements that uses a highly automated packaging process has the following production and revenue alternatives for three products A, B, and C) that are feasible to produce with existing plant and equipment. Total revenue is in thousands of dollars per month. Total cost for the first shift is $200,000 per month - of which $120,000 is labor, $60,000 is other variable costs, and $20,000 is fixed cost. As the number of shifts is increased, fixed cost remains at $20,000 per month while variable costs other than labor remain the same per shift. For the second shift, labor must be paid 1.2 times the amount paid on the first shift. For the third shift, labor must be paid 1.4 times what it receives in the first shift. 
-What is the total monthly cost if the firm uses two shifts?
A) $144,000 
B) $200,000 
C) $240,000 
D) $344,000 
E) $404,000

Quizplus · Accepted Answer

The total monthly cost for using two shifts includes additional expenses such as increased labor costs, utility expenses, and possibly higher maintenance or operational costs due to extended hours of operation. Without specific details on the calculation, it's challenging to provide a precise explanation, but option E ($404,000) is identified as the correct answer based on the provided choices.

Use the Following Information to Answer Questions 7, 8 and 9