Filing Company manufactures three types of filing storage units. Each of the three types requires the...
Filing Company manufactures three types of filing storage units. Each of the three types requires the use of a special machine that has a total operating capacity of 15,000 hours per year. Information on the three types of storage units are as follows:
|
Basic |
Standard |
Deluxe |
|
|
Selling price |
$9 |
$30 |
$35 |
|
Variable cost |
$6 |
$20 |
$10 |
|
Machine hours required |
0.10 |
0.50 |
0.75 |
Required
- Assume that the marketing director has determined that the company can sell as many units as it can produce of any of the three storage types. Determine how many units of each type of unit should be produced and sold to maximize the company’s contribution margin. Show numbers to support your determination. What is the total contribution margin for your selection?
- Assume that the marketing director has determined that the company can sell no more than 12,000 units of the deluxe model but up to 50,000 units of the basic and standard model. Determine how many units of each type of unit should be produced and sold to maximize the company’s contribution margin. Show numbers to support your determination. What is the total contribution margin for your selection?
Homework Answers
1.
| Basic | Standard | Deluxe | |
| Selling price | $ 9 | $ 30 | $ 35 |
| Variable Cost | $ 6 | $ 20 | $ 10 |
| Contribution Margin per unit | $ 3 | $ 10 | $ 25 |
| Machine hours required | 0.1 | 0.5 | 0.75 |
| Contribution Margin per machine hour | $ 30 | $ 20 | $ 33 |
Since Deluxe has highest contribution margin per machine hour. 15000 machine hours will be used for Deluxe
Total Units of Deluxe = 15000 / 0.75 = 20000 units
Total Contribution Margin = 20000 x $25 = $500000
2.
| Basic | Standard | Deluxe | Total | |
| Machine hours required | 0.1 | 0.5 | 0.75 | |
| Hours required for max production | 5000 | 1000 | 9000 | |
| Units | 50000 | 2000 | 12000 | |
| Contribution Margin per unit | $ 3 | $ 10 | $ 25 | |
| Total Contribution Margin | $ 1,50,000 | $ 20,000 | $ 3,00,000 | $ 4,70,000 |
Add Answer to:
Filing Company manufactures three types of filing storage units.
Each of the three types requires the...
Having trouble trying to solve 8-62 Problem 8-62 Product Mix Decision, Single Constraint Scaling Company manufactures...
Having trouble trying to solve
8-62
Problem 8-62 Product Mix Decision, Single Constraint Scaling Company manufactures three types of DVD storage units. Each of the three types re- quires the use of a special machine that has a total operating capacity of 15,000 hours per year. Information on the three types of storage units is as follows: Selling price Variable cost Machine hours required Basic $9.00 $6.00 0.10 Standard $30.00 $20.00 0.50 Deluxe $35.00 $10.00 0.75 Sealing's marketing director has...
Taco Company manufactures three products. Each of the three types requires the use of a special...
Taco Company manufactures three products. Each of the three types requires the use of a special machine that has a total operating capacity of 15,000 hours per year. Information on the three types of products is as follows: X Y Z Selling price $9.00 $30.00 $35.00 Variable cost $6.00 $20.00 $10.00 Machine hours required 0.10 0.50 0.75 Taco Company's marketing director has assessed demand for the three types of products and believes that the firm can sell as many units...
Storage Solutions produces plastic storage bins for household storage needs. The company makes two sizes of...
Storage Solutions produces plastic storage bins for household storage needs. The company makes two sizes of bins: Large (50 gallon) and Regular (35 gallon). Demand for the product used to be so high that the company could sell as many of each size as it could produce. The same machinery is used to produce both sizes. The machinery is available for only 3,000 hours per period. The company can produce 10 Large bins every hour compared to 15 Regular bins...
he Wellbuilt Company produces two types of wood chippers, economy and deluxe. The deluxe model requires...
he Wellbuilt Company produces two types of wood chippers, economy and deluxe. The deluxe model requires 3 hours to assemble and 1 2 hour to paint, and the economy model requires 2 hours to assemble and 1 hour to paint. The maximum number of assembly hours available is 24 per day, and the maximum number of painting hours available is 8 per day. If the profit on the deluxe model is $90 per unit and the profit on the economy...
Tra c es tipes of Regular and was the c a se and related demand is such could use of machine hos produc...
Tra c es tipes of Regular and was the c a se and related demand is such could use of machine hos producing model Them es are through the same production department Potepinis Data Teadlight Product Me Analysis TreadLight Product Mix Analysis Deluxe Regular Contribution margin for equivalent number of direct labor hours Contribution margin for equivalent number of machine hours Contribution margin per unit Fixed costs per unit Sale price per unit Units produced with equivalent number of direct...
Please open the attachment and enlarge to view Options are Highest or lowest two or four...
Please open the attachment and enlarge to view
Options are Highest or
lowest
two or four or five
only one deluxe or only the deluxe
model or two times as many deluxe model as regular
models or two times as many regular models as
deluxe models
ExerLight produces two types of exercise treadmills: Regular and Deluxe. The exercise craze is such that ExerLight could use all of its available machine hours producing either model. The two models are processed through...
A company produces three types of pencil holders: basic, deluxe, and supreme. All types require plastic, rubber, and silver as shown: type. plastic. rubber. silver basic. 1. 2. 2 deluxe. 2. 2. 4 supr...
A company produces three types of pencil holders: basic, deluxe, and supreme. All types require plastic, rubber, and silver as shown: type. plastic. rubber. silver basic. 1. 2. 2 deluxe. 2. 2. 4 supreme. 1. 2. 4 the company has 1200 units of plastic, 1400 units of rubber, and 2700 units of silver. it makes a profitof $3, $4, and $2 respectively on basic, deluxe and supreme pencil holders. Assuming that all pencil holders which can be manufactured can be...
Maxey & Sons manufactures two types of storage cabinets—Type A and Type B—and applies manufacturing overhead...
Maxey & Sons manufactures two types of storage cabinets—Type A and Type B—and applies manufacturing overhead to all units at the rate of $104 per machine hour. Production information follows. Type A Type B Anticipated volume (units) 20,800 39,000 Direct-material cost per unit $ 20 $ 30 Direct-labor cost per unit 25 25 The controller, who is studying the use of activity-based costing, has determined that the firm’s overhead can be identified with three activities: manufacturing setups, machine processing, and...
Maxey & Sons manufactures two types of storage cabinets—Type A and Type B—and applies manufacturing overhead...
Maxey & Sons manufactures two types of storage cabinets—Type A and Type B—and applies manufacturing overhead to all units at the rate of $160 per machine hour. Production information follows. Type A Type B Anticipated volume (units) 32,000 60,000 Direct-material cost per unit $ 48 $ 72 Direct-labor cost per unit 53 53 The controller, who is studying the use of activity-based costing, has determined that the firm’s overhead can be identified with three activities: manufacturing setups, machine processing, and...
Can you please help me with this managerial accounting problem? GetFit produces two types of exercise...
Can you please help me with this managerial accounting
problem?
GetFit produces two types of exercise treadmills: Regular and Deluxe. The exercise craze and related demand is such that GetFit could use all of its available machine hours producing either model. The two models are processed through the same production department. (Click the icon to view the data.) What product mix will maximize operating income? (Hint: Use the allocation of fixed manufacturing overhead to determine the proportion of machine hours...
Having trouble trying to solve
8-62
Problem 8-62 Product Mix Decision, Single Constraint Scaling Company manufactures three types of DVD storage units. Each of the three types re- quires the use of a special machine that has a total operating capacity of 15,000 hours per year. Information on the three types of storage units is as follows: Selling price Variable cost Machine hours required Basic $9.00 $6.00 0.10 Standard $30.00 $20.00 0.50 Deluxe $35.00 $10.00 0.75 Sealing's marketing director has...
Storage Solutions produces plastic storage bins for household storage needs. The company makes two sizes of bins: Large (50 gallon) and Regular (35 gallon). Demand for the product used to be so high that the company could sell as many of each size as it could produce. The same machinery is used to produce both sizes. The machinery is available for only 3,000 hours per period. The company can produce 10 Large bins every hour compared to 15 Regular bins...
Tra c es tipes of Regular and was the c a se and related demand is such could use of machine hos producing model Them es are through the same production department Potepinis Data Teadlight Product Me Analysis TreadLight Product Mix Analysis Deluxe Regular Contribution margin for equivalent number of direct labor hours Contribution margin for equivalent number of machine hours Contribution margin per unit Fixed costs per unit Sale price per unit Units produced with equivalent number of direct...
Please open the attachment and enlarge to view
Options are Highest or
lowest
two or four or five
only one deluxe or only the deluxe
model or two times as many deluxe model as regular
models or two times as many regular models as
deluxe models
ExerLight produces two types of exercise treadmills: Regular and Deluxe. The exercise craze is such that ExerLight could use all of its available machine hours producing either model. The two models are processed through...
Can you please help me with this managerial accounting
problem?
GetFit produces two types of exercise treadmills: Regular and Deluxe. The exercise craze and related demand is such that GetFit could use all of its available machine hours producing either model. The two models are processed through the same production department. (Click the icon to view the data.) What product mix will maximize operating income? (Hint: Use the allocation of fixed manufacturing overhead to determine the proportion of machine hours...
Most questions answered within 3 hours.
-
Assume that in a hydrogen atom, the electron circles the nucleus
in a circle of radius...
asked 9 minutes ago -
Evelyn incorporates her sole proprietorship, transferring it to
newly formed Papaya Corporation. The assets transferred have...
asked 1 minute ago -
A
752 mL sample of water was placed in a 1000 gram pan of aluminum.
The...
asked 2 minutes ago -
1 point) Given the significance level α=0.01 find the following:
(a) left-tailed z value z= (b)...
asked 3 minutes ago -
Calculate the expected value, the variance, and the standard
deviation of the given random variable X....
asked 5 minutes ago -
Describe two obstacles that makes fixing atmospheric nitrogen
difficult.
asked 14 minutes ago -
T
F 53) Most differences
between human groups are the result of biology rather than
culture....
asked 19 minutes ago -
A 5.20 mW helium neon laser emits a visible laser beam with a
wavelength of 633...
asked 22 minutes ago -
Assignment:
Your
organization has made a strategic decision
to
outsourcework
currently performed in house. You have...
asked 20 minutes ago -
A hospital performs 100 surgeries per week. The probability that
complications after surgery occur is 10%....
asked 21 minutes ago -
In preparing its cash flow statement for the year ended December
31, 2018, Green Co. gathered...
asked 23 minutes ago -
Donna is 18 years old and full time accounting student.She is
saving for an overseas holiday...
asked 23 minutes ago