Question

Product Decisions Under Bottlenecked Operations Youngstown Glass Company manufactures three types of safety plate glass: large, medium, and small. All three products have high demand. Thus, Youngstown Glass is able to sell all the safety glass that it can make. The production process includes an autoclave operation, which is a pressurized heat treatment. The autodave is a production bottleneck. Total fixed costs are $236,000 for the company as a whole. In addition, the following information is available about the three products: Large Medium Small $197 $264 $141 Unit selling price Unit variable cost Unit contribution margin $42 Autodave hours per unit Total process hours per unit 18 Budgeted units of production 4,900 4,900 4,900 a. Determine the contribution margin by glass type and the total company income from operations for the budgeted units of production Large Medium Total Units produced Small Revenues Variable costs Contribution margin Fixed costs Check My Work

Answer 1

rate positively ..

Ans a)
		Large	Medium	Small	Total
	Unit produced	4,900	4,900	4,900
	Revenues	965,300	1,293,600	690,900	2,949,800
	Variable cost	759,500	1,058,400	607,600	2,425,500
	Contribution margin	205,800	235,200	83,300	524,300
	Fixed cost =				236,000
	Income from operation				288,300
Ans b)
		Large	Medium	Small
	Contribution margin	205,800	235,200	83,300
	Autoclave hours per unit	6	4	2
	Unit contribution margin per production bottleneck hour	34,300	58,800	41,650