Wildhorse Industries manufactures chairs and tables that are in high demand by local office furniture stores. Following is information for each of these products: Selling price per item Variable cost per item Contribution margin per item Machine hours per item Chairs O $9120 O $13080 O $10370 O $7320 $72.00 60.00 $12.00 1.60 Tables $92.00 75.00 $17.00 1.60 Wildhorse has 976 machine hours available each month. The demand for chairs is 580 units per month and the demand for tables is 360 units per month. If Wildhorse allocates its production capacity between the chairs and tables so that it maximizes the company's contribution margin, what will the total contribution margin be?

Wildhorse Industries manufactures chairs and tables that are in high demand by local office furniture stores. Following is information for each of these products: Selling price per item Variable cost per item Contribution margin per item Machine hours per item Chairs O $9120 O $13080 O $10370 O $7320 $72.00 60.00 $12.00 1.60 Tables $92.00 75.00 $17.00 1.60 Wildhorse has 976 machine hours available each month. The demand for chairs is 580 units per month and the demand for tables is 360 units per month. If Wildhorse allocates its production capacity between the chairs and tables so that it maximizes the company's contribution margin, what will the total contribution margin be?

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter2: Basic Cost Management Concepts

Section: Chapter Questions

Problem 35P: Orman Company produces neon-colored covers for tablets (e.g., iPads). For last year, Orman reported...

See similar textbooks

Similar questions

Pharoah Industries manufactures chairs and tables that are in high demand by local office furniture stores. Following is information for each of these products: Selling price per item Variable cost per item Contribution margin per item Machine hours per item Chairs O $11270 $11520 $10880 O $17390 $78.00 61.00 $17.00 1.60 Tables $95.00 77.00 $18.00 1.60 Pharoah has 1024 machine hours available each month. The demand for chairs is 610 units per month and the demand for tables is 390 units per month. If Pharoah allocates its production capacity between the chairs and tables so that it maximizes the company's contribution margin, what will the total contribution margin be?
Semen’s is a manufacturer that produces bracket assemblies. Demand for bracket assemblies (x) is 135 units. The following is the BoM in indented form: ITEM DESCRIPTION USAGE X BRACKET ASSEMBLY 1 A WALL BOARD 4 B HANGER SUBASSEMBLY 2 D HANGER CASTING 2 E CERAMIC KNOB 2 C RIVIT HEAD SCREW 3 F METAL TONG 5 G PLASTIC CAP 2 BELOW IS A TABLE INDICATING CURRENT INVENTORY LEVELS ITEM X A B…
The Fabric World sells fabrics to a wide range of industrial and consumer users. One of the products it carries is denim cloth, used in the manufacture of jeans and carrying bags. The supplier for the denim cloth pays all incoming freight. No incoming inspection of the denim is necessary because the supplier has a track record of delivering high-quality merchandise. The purchasing officer of the Fabric World has collected the following information: Annual demand for denim cloth 40,700 yards Ordering cost per purchase order $185 Carrying cost per year 10% of purchase costs Safety-stock requirements = None Cost of denim cloth $11 per yard The purchasing lead time is 2 weeks. The Fabric World is open 220 days a year (44 weeks for 5 days a week). Q. Calculate the number of orders that will be placed each year.
EOQ for a retailer. The Cloth Center sells fabrics to a wide range of industrial and consumer users. One of the products it carries is denim cloth, used in the manufacture of jeans and carrying bags. The supplier for the denim cloth pays all incoming freight. No incoming inspection of the denim is necessary because the supplier has a track record of delivering high-quality merchandise. The purchasing officer of the Cloth Center has collected the following information: Annual demand for denim cloth 20,000 yards Ordering cost per purchase order P160 Carrying cost per year 20% of purchase costs Safety-stock requirements None Cost of denim cloth P8 per year The purchasing lead time is 2 weeks. The Cloth Center is open 250 days a year (50 weeks for 5 days a week).1. Calculate the EOQ for denim cloth.2. Calculate the number of orders that will be placed each year3. Calculate the reorder point for denimcloth.
Sandhill Decor sells home decor items through three distribution channels—retail stores, the Internet, and catalog sales. Each distribution channel is evaluated as an investment center. Selected results from the latest year are as follows: Retail Stores Internet Catalog Sales Sales revenue $12,000,000 $3,700,000 $6,600,000 Variable expenses 4,000,000 1,355,000 1,950,000 Direct fixed expenses 5,960,000 994,500 4,188,000 Average assets 8,000,000 3,700,000 2,000,000 Required rate of return 12% 12% 12% (a1) Calculate the margin and asset turnover for each of the three distribution channels. (Round answers to 2 decimal places, e.g. 5.12% or 5.12.) Retail Stores Internet Catalog Sales Margin enter percentages % enter percentages % enter percentages % Asset turnover enter a ratio enter a ratio enter a ratio
The Fabric World sells fabrics to a wide range of industrial and consumer users. One of the products it carries is denim cloth, used in the manufacture of jeans and carrying bags. The supplier for the denim cloth pays all incoming freight. No incoming inspection of the denim is necessary because the supplier has a track record of delivering high-quality merchandise. The purchasing officer of the Fabric World has collected the following information: Annual demand for denim cloth 40,700 yards Ordering cost per purchase order $185 Carrying cost per year 10% of purchase costs Safety-stock requirements = None Cost of denim cloth $11 per yard The purchasing lead time is 2 weeks. The Fabric World is open 220 days a year (44 weeks for 5 days a week). Q. Calculate the reorder point for denim cloth
ABC, wholesale, customer protability. Veritek Wholesalers operates at capacity and sells furniture items to four department-store chains (customers). Mr. Veritek commented, “We apply ABC to determine product-line protability. The same ideas apply to customer protability, and we should nd out our customer protability as well.” Veritek Wholesalers sends catalogs to corporate purchasing departments on a monthly basis. The customers are entitled to return unsold merchandise within a six-month period from the purchase date and receive a full purchase price refund. The following data were collected from last year’s operations:
The Fabric World sells fabrics to a wide range of industrial and consumer users. One of the products it carries is denim cloth, used in the manufacture of jeans and carrying bags. The supplier for the denim cloth pays all incoming freight. No incoming inspection of the denim is necessary because the supplier has a track record of delivering high-quality merchandise. The purchasing officer of the Fabric World has collected the following information: Annual demand for denim cloth 40,700 yards Ordering cost per purchase order $185 Carrying cost per year 10% of purchase costs Safety-stock requirements = None Cost of denim cloth $11 per yard The purchasing lead time is 2 weeks. The Fabric World is open 220 days a year (44 weeks for 5 days a week). Q. Calculate the EOQ for denim cloth.
Good Scent, Inc., produces two colognes: Rose and Violet. Of the two, Rose is more popular. Data concerning the two products follow: Rose Violet Expected sales (in cases) 58,000 11,600 Selling price per case $102 $80 Direct labor hours 32,650 6,100 Machine hours 10,850 2,800 Receiving orders 48 28 Packing orders 96 45 Material cost per case $49 $42 Direct labor cost per case $9 $9 The company uses a conventional costing system and assigns overhead costs to products using direct labor hours. Annual overhead costs follow. They are classified as fixed or variable with respect to direct labor hours. Fixed Variable Direct labor benefits $ — $193,750 Machine costs 181,000* 232,500 Receiving department 227,500 — Packing department 111,000 — Total costs $519,500 $426,250 * All depreciation Required: 1. Using the conventional approach, compute the number of cases of Rose and the number of cases of Violet that must be sold…
Mirabella Beauty manufactures and sells a face cream to small specialty stores in the greater Los Angeles area. It presents the monthly operating income statement shown here to George Lupe, a potential investor in the business. Help Mr. Lupe understand Mirabella Beauty's cost structure. Mirabella Beauty Operating Income Statement, June 2020 Units sold $10,000 Revenues $200,000 Cost of goods sold Variable manufacturing costs $70,000 Fixed manufacturing costs $32,900 Total 102,900 Gross margin 97,100 Operating costs Variable marketing costs $58,000 Fixed marketing and administrative costs 17,500 Total operating costs 75,500 Operating income $21,600 Recast the income statement to emphasize contribution margin. Calculate the contribution margin percentage and breakeven point in units and revenues for June2020. What is the margin of safety (in units) for June 2020? If sales in June were only 8,500 units and Mirabella's tax rate is 30%, calculate its net income.
Orman Company produces neon-colored covers for tablets (e.g., iPads). For last year, Orman reported the following: Last year, Orman produced 89,000 units and sold 90,500 units at 10.50 per unit. Required: 1. Prepare a statement of cost of goods manufactured. 2. Prepare an absorption-costing income statement.
The Cloth Bonanza sells fabrics to a wide range of industrial and consumer users. One of the products it carries is denim cloth, used in the manufacture of jeans and carrying bags. The supplier for the denim cloth pays all incoming freight. No incoming inspection of the denim is necessary because the supplier has a track record of delivering high-quality merchandise. The purchasing officer of the Cloth Banaza has collected the following information: Annual demand for denim cloth 29,250 yards Ordering cost per purchase order $195 Carrying cost per year 20% of purchase costs Safety-stock requirements None Cost of denim cloth $15 per yard The purchasing lead time is 2 weeks. The Cloth Banaza is open 250 days a year (50 weeks for 5 days a week). 1. Calculate the EOQ for denim cloth.…