Which of the following are true about cost allocation? A. Cost allocation is a form of transfer pricing for indirect costs B. Co
1 answer:
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Answer:
400 pizzas
Explanation:
The complete question would be:
<em>You are going into the business of making pizzas. The following is the list of ingredients to make ONE pizza: </em>
<em>400 g flour 50 mL water </em>
<em>10 g yeast 120 g sauce </em>
<em>250 g cheese 5 g oregano </em>
<em>5 g basil </em>
<em>Your business has purchased 500 pizza pans, 60 kg of sauce, 100 kg of cheese, 2.5 kg of basil, 2.5 kg of oregano, 5 kg of yeast, and 200 kg of flour. You have as much water as you need. How many pizzas can you make? </em>
You are going to have to make a couple of conversions to do this. Since everything you need is indicated in grams, we first need to convert everything you have in grams.
There are 1,000 g in 1 kg. So now we convert them all:
60 kg of sauce
100 kg of cheese
2.5 kg of basil
2.5 kg of oregano
5 kg of yeast
200 kg of flour
So now that we know what we have, we determine how many pizzas we can make with the amount of each ingredient. We get the ratio of each ingredient to one pizza to determine how many we can make:
<u>Flour:</u>
Available: 200,000g
Needed: 400g
<u>Yeast:</u>
Available: 5,000g
Needed: 10g
<u>Cheese:</u>
Available: 100,000g
Needed: 250g
<u>Basil:</u>
Available: 2,500g
Needed: 5g
<u /><u />
<u>Sauce:</u>
Available: 60,000g
Needed: 120g
<u /><u />
<u>Oregano:</u>
Available: 2,500g
Needed: 5g
<u /><u />
We do not need to consider water, because it will provide as many as we will need.
So here we see that all but one ingredient is able to yield 500 pizzas. Cheese is the only one that yields less than 500, specifically 400 only. This is your limiting ingredient and this ingredient determines how many pizzas you can make. Because when you run out of cheese, you can no longer make a pizza.