Question

Chapter 7 Assignment A Saved Blossom, Inc., is a small company that manufactures three versions of patio tables. Unit information for its products follows: Table A Table B Table C $ 46 $ 50 $ 64 8 9 10 points Sales price Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead 2 8 3 3 5 5 5 eBook Required number of labor hours Required number of machine hours 0.50 4.00 0.50 2.50 1.00 2.00 Print Blossom has determined that it can sell a limited number of each table in the upcoming year. Expected demand for each model follows: References Table A Table B Table C 50,000 units 30,000 units 20,000 units Required: 1. Suppose that direct labor hours has been identified as the bottleneck resource. Determine how Blossom should prioritize production by rank ordering the products from 1 to 3. 2. If Blossom has only 45,000 direct labor hours available, calculate the number of units of each table that Blossom should produce to maximize its profit. 3. Suppose that the number of machine hours has been identified as the most constrained resource. Determine how Blossom should prioritize production by rank ordering the products from 1 to 3. 4. If Blossom has only 238,000 machine hours available, calculate the number of units of each table that Blossom should produce to maximize its profit. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Suppose that direct labor hours has been identified as the bottleneck resource. Determine how Blossom should prioritize production by rank ordering the products from 1 to 3. Ranking Product Table A Table B Table C Required 1 Required 2 >

Answer 1

Requirement 1 Requirement 2 No of Labour hours available Less : Hours for Table B (30000*0.5) 45000 -15000 Sale Price Less: Direct material Direct labour Variable mafacturing overhead Table A $ 46.00 $ 8.00 $ 2.00 $ 3.00 Table B $50.00 $ 9.00 $ 4,00 $ 3.00 Table C $64.00 $ 10.00 $ 8.00 $ 3.00 30000 -25000 Less : Hours for Table A (50000*0.5) Hours available for Table C No of units for table c with available 1000 hours: 5000 hours /1 hour per unit 5000 $43.00 Contribution (A) Required no of labour hours (B) Contribution per Labour Hour (A/B) $33.00 0.5 $66.00 $34.00 0.5 $68.00 5000 units $43.00 Ranking II Product Table A Table B Tablec Product Table A Table B Table C Units produced 50000 30000 5000 III Note : Ranking is Given Based on highest Contribution per Hour Requirement 3 Requirement 4 Table A $ 46.00 $ 8.00 $ 2.00 $ 3.00 Sale Price Less: Direct material Direct labour Variable mafacturing overhead Table B $50.00 $ 9.00 $ 4.00 $ 3.00 Table C $64.00 $ 10.00 $ 8.00 $ 3.00 No of Machine hours available Less : Hours for Table C (20000*2) 238000 -40000 198000 -75000 Contribution (A) Required no of Machine hours (B) Contribution per Machine Hour (A/B) $33.00 4 $ 8.25 $34.00 2.5 $13.60 $43.00 2 $ 21.50 Less : Hours for Table B 30000*2.5 Hours available for Table A No of units for table c with available 123000 hours: 123000/4 123000 30750 Product Table A Table B Table C Ranking III II Product Table A Table B Table C Units produced 30750 30000 20000