2. a. The question requires to calculate the department which constrains the production if suppose the Conroy Company focuses solely on producing Product A200. For this we can use the data on hours per unit of each department and total capacity(in hours) of each department.
Thus by dividing the total capacity of each department by the no. of hours per unit of A200, we can find out the maximum output that can be obtained in each department. Please refer the excel screenshot below for the same -
From the above excel file we can observe that the constraining resource if we consider that only Product A200 is produced is "Assembly & Pack" because it is giving maximum output of 1500 which is the least among the 4 departments.
2. b. Here we have to find out product A200's contribution margin per hour of the constraining resource identified in 2.a. above i.e. "Assemble & Pack" department.
For this first we have to find out the contribution margin per unit of A200 which is nothing but the difference between the Selling Price per unit and Variable Cost per unit. Further to find out the contribution margin per hour of A200 of the "Assemble & Pack" department we have to divide the contribution margin per unit by the no. of hours A200 requires in "Assemble & Pack" department.
The contribution per unit of A200 comes to $900 and contribution per hour of "Assemble & Pack" department comes to $300 as shown in the excel screenshot below -
Conroy Company manufactures two products-B100 and A200. The company provided the following information with respect to...
Conroy Company manufactures two products-B100 and A200. The company provided the following information with respect to these products: Estimated customer demand (in units) Selling price per unit Variable expenses per unit B100 2,800 $ 1,200 $ 700 A200 2,000 $2,100 $1,200 The company has four manufacturing departments-Fabrication, Molding, Machining, and Assemble & Pack. The capacity available in each department (in hours) and the demands that one unit of each of the company's products makes on those departments is as follows:...
The Walton Toy Company manufactures a line of dolls and a sewing kit. Demand for the company's products is increasing, and management requests assistance from you in determining an economical sales and production mix for the coming year. The company has provided the following data: Product Debbie Trish Sarah Mike Sewing kit Demand Selling Next year Price (units) per Unit 64,000 $22.00 56,000 $ 8.00 49,000 $38.50 45,600 $ 13.00 339,000 $ 9.40 Direct Materials $4.10 $2.50 $8.54 $3.40 $4.60...
Brun Products, located in Ann Arbor, Michigan, produces two lines of electric toothbrushes: Deluxe and Standard. Because Bruncan sell all the toothbrushes produces, the owners we expanding the plant. They re deciding which product line to emphasize. To make this decision, they assemble the following data (Click the icon to view the data) After expansion, the factory will have a production capacity of 4,500 machine hours per month. The planten manufacture ether 2 Standard electric toothbrushes or 28 Delure electric...
The Walton Toy Company manufactures a line of dolls and a sewing kit. Demand for the company’s products is increasing, and management requests assistance from you in determining an economical sales and production mix for the coming year. The company has provided the following data: Product Demand Next year (units) Selling Price per Unit Direct Materials Direct Labor Debbie 66,000 $ 37.00 $ 4.30 $ 3.50 Trish 58,000 $ 5.00 $ 1.20 $ 0.84 Sarah 51,000 $ 35.50 $ 8.84...
Required:1. How many direct labor hours are used to manufacture one unit of each of the company’s five products?2. How much variable overhead cost is incurred to manufacture one unit of each of the company’s five products?3. What is the contribution margin per direct labor-hour for each of the company’s five products?4. Assuming that direct labor-hours is the company’s constraining resource, what is the highest total contribution margin that the company can earn if it makes optimal use of its...
2 Problem 12-25 Volume Trade-Off Decisions [LO12-5, LO12-6 The Walton Toy Company manufactures a line of dolls and a sewing kit. Demand for the company's products is increasing, and management requests assistance from you in determining an economical sales and production mix for the coming year. The company has provided the following data: points Next Se11ing yearPrice Direct Direct $4.40 $1.20 1.20 $6.59 4.50 $2.10 3.3 $3.30 0.90 1,000 $15.50 43,000 6.00 36,000 $25.00 40,000 $11.00 326,000 8.10 2.70 Trish...
Choosing the Optimal Product Mix with One Constrained Resource Billings Company produces two products, Product Reno and Product Tahoe. Each product goes through its own assembly and finishing departments. However, both of them must go through the painting department. The painting department has capacity of 1,640 hours per year. Product Reno has a unit contribution margin of $125 and requires five hours of painting department time. Product Tahoe has a unit contribution margin of $52 and requires two hours of...
The Walton Toy Company manufactures a line of dolls and a sewing kit. Demand for the company's products is increasing, and management requests assistance from you in determining an economical sales and production mix for the coming year. The company has provided the following data: Product Debbie Trish Sarah Demand selling Next year Price (units) per Unit 53,000 $19.69 45,000 $7.99 38,000 $29.00 32.000 $13.00 328,000 $ 8.30 Direct Materials $4.60 $1.40 $6.89 52.30 $3.50 Direct Labor $ 4.40 S...
Service Emphasis The following analysis of selected data is for each of the two services Gates Corporation provides. Service A Service B $38 $34 Per-service data at 10,000 services Sales price Service costs: Variable Fixed Selling and administrative expenses: Variable Fixed w In the Gates operation, labor capacity is the company's constraining resource. Each unit of A requires 3 hours of labor, and each unit of B requires 2 hours of labor. Assuming that all services can be sold at...
Koontz Company manufactures two models of industrial components-a Basic model and an Advanced Model. The company considers all of its manufacturing overhead costs to be fixed and it uses plantwide manufacturing overhead cost allocation based on direct labor-hours. Koontz's controller prepared the segmented income statement that is shown below for the most recent year (he allocated selling and administrative expenses to products based on sales dollars): Basic 20,000 Advanced 10,000 Total 30,000 Number of units produced and sold Sales Cost...