The company has only 1790 machine hours available each period. If demand exceeds the company's capacity, in what sequence should orders for the three products be filled to maximize the company's total contribution margin?
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- A company’s productive capacity is limited to 480,000 machine hours. Product X requires 10 machine hours to produce; Product Y requires 2 machine hours to produce. Product X sells for $32 per unit and has variable costs of $12 per unit; Product Y sells for $24 per unit and has variable costs of $10 per unit. Assuming that the company can sell as many of either product as it produces, it should a. Produce X and Y in the ratio of 57% X and 43% Y. b. Produce X and Y in the ratio of 83% X and 17% Y. c. Produce equal amounts of Product X and Product Y. d. Produce only Product X. e. Produce only Product Y.Division A has the capacity to produce 120,000 units. The normal selling price of each unit is P80. The variable cost incurred for each unit is P42. Total direct fixed cost for the relevant range is P1,150,000. Division B can use the products of Division A as an input in its manufacturing process but is currently acquiring the said products from an outside supplier. The price per unit is P75. Total annual demand is 30,000 units. Assuming sufficient capacity, what is the minimum acceptable transfer price to Division A? Assuming only 22,500 excess capacity, what is the minimum acceptable transfer price to Division A? Assuming only 22,500 excess capacity and that Division A can avoid variable selling cost per unit of P4 but will incur a one-time fixed cost of P30,000 for the order, what is the minimum acceptable transfer price to Division A? Assuming no excess capacity, what is the minimum acceptable transfer price to Division A? What is the maximum acceptable transfer…Ritchie manufacturing company makes a product that it sells for $170 per unit. The company incurs variable manufacturing costs of $86 per unit variable selling expenses are 416 per unit, annual fixed manufacturing costs are $458,000, and fixed selling and administrative costs are $242,400 per year. Required Determine the break-even point in units and dollars using each of the following approaches: a) use the equation method b) use the contribution margin per unit approach c) prepare a contribution margin income statement for the break-even sales volume.
- Below are details of the four products made by Krane Ltd. A B C D Selling price per unit 60 80 100 120 Variable cost per unit 24 36 48 50 Machine time per unit 3 4 6.5 8 Weekly demand for all products is the same. Unfortunately, time available on the machine used to produce all four products is likely to be reduced in the coming week due to maintenance work required. If output of one of the products needs to be restricted and management want to lose as little profit as possible, which of the product line’s outputs should they restrict? Product A Product B Product C Product DABC INC product is currently produced at 10 materials, 40 labor and 15 overhead. If automation is implemented, the product can be produced at 10 materials, 5 labor and 35 overhead. At a total of 10,000 units, what is the net incremental cost or benefit if the production decides to move into automation?oncorde Ltd has been asked to quote a price for an order of 8 units of Product Delta. Making this product will require skilled labour, which is currently in hort supply and is paid £15 an hour. If the order is accepted, all necessary labour will have to be transferred from existing work. As a result, other orders will be lost. It is estimated that for each hour transferred to this contract £45 will be lost (calculated as lost sales revenue £75, less materials £15 and labour 15). The production manager believes that, owing to a learning process, the time taken to make each unit will reduce, from 20 hours to make the first one, by one hour a unit made. (That is 20 hours to make the first one, 19 hours to make the second, 18 hours to make the third one and so on.) What is the total relevant cost of skilled labour for the purposes of the order? The relevant cost for skilled labour will be will be £. ... Time Remaining: 00:43:50 Next
- Olsen Company produces two products. Product A has a contribution margin of $30 and requires 10 machine hours. Product B has a contribution margin of $24 and requires 4 machine hours. Determine the more profitable product assuming the machine hours are the constraint. Unit contribution margin per bottleneck hour:Product A $_____Product B $_____ Product ____ is most profitable.Any manufacturing company has costs which include fixed costs such as plant overhead, product design, setup, and promotion; and variable costs that depend on the number of items produced. The revenue is the amount of money received from the sale of its product. The company breaks even if the revenue is equal to the cost. A company manufactures dog leashes that sell for $18.13, including shipping and handling. The monthly fixed costs (advertising, rent, etc.) are $22,920 and the variable costs (materials, shipping, etc.) are $9.78 per leash. How many leashes must be produced and sold each month for the company to break even? leashes. Round to the nearest leash.Goshford Company produces a single product and has capacity to produce 100,000 units per month. Costs to produce its current sales of 80,000 units follow. The regular selling price of the product is $100 per unit. Management is approached by a new customer who wants to purchase 20,000 units of the product for $75 per unit. If the order is accepted, there will be no additional fixed manufacturing overhead and no additional fixed selling and administrative expenses. The customer is not in the company’sregular selling territory, so there will be a $5 per unit shipping expense in addition to the regular variable selling and administrative expenses. Determine whether management should accept or reject the new business.
- Blanchard Company manufactures a single product that sells for $180 per unit and whose total variable costs are $126 per unit. The company's annual fixed costs are $842,400. Management targets an annual pretax income of $1,350,000. Assume that fixed costs remain at $842,400. (1) Compute the unit sales to earn the target income. Choose Numerator: Choose Denominator: Units to Achieve Target Units to achieve target %3D (2) Compute the dollar sales to earn the target income. Choose Numerator: Choose Denominator: Dollars to Achieve Target Dollars to achieve target %3DHitec industries produces three products with the following costs and selling prices: Product Y Selling price per unit P40 P30 P35 Variable costs per unit 24 18 20 Contribution margin per unit 18 14 15 Direct labor hours per unit 3 Machine hours per unit 7 4 If Hitec has a limit of 30,000 machine hours but no limit on units sold or direct labor hours, then the three products should be produced in which order? Y. Z, X X, Y, Z X, Z, Y Z, X, Y 2.Please explain each anwer with formula. Regarding the following information, how many machines would be needed to handle the required volume? Processing time per unit (minute) product demand A B C 1 16000 3 4 2 2 12000 4 4 3 3 6000 5 6 4 4 30000 2 2 1 In order to meet annual demand for all products, how many machines in each type are needed? Based on fixed annual cost (Alternative A with $40,000, B with $30,000 and C with $80,000), which type of machine and how many will cost least to satisfy the demand? Consider the operation of machines 10 hours per day and 200 days a year.