MANAGERIAL ACCOUNTING-CUSTOM EBOOK>I<
12th Edition
ISBN: 9781307661217
Author: HILTON
Publisher: INTER MCG2
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Chapter 14, Problem 57P
Ozark Industries manufactures and sells three products, which are manufactured in a factory with four departments. Both labor and machine time are applied to the products as they pass through each department. The machines and labor skills required in each department are so specialized that neither machines nor labor can be switched from one department to another.
Ozark Industries’ management is planning its production schedule for the next few months. The planning is complicated, because there are labor shortages in the community and some machines will be down several months for repairs.
Management has assembled the following information regarding available machine and labor time by department and the machine hours and direct-labor hours required per unit of product. These data should be valid for the next six months.
Inventory levels are satisfactory and need not be increased or decreased during the next six months. Unit price and cost data that will be valid for the next six months are as follows:
Required:
- 1. Calculate the monthly requirement for machine hours and direct-labor hours for the production of products M07, T28, and B19 to determine whether the monthly sales demand for the three products can be met by the factory.
- 2. What monthly production schedule should Ozark Industries select in order to maximize its dollar profits? Explain how you selected this production schedule, and present a schedule of the contribution to profit that would be generated by your production schedule.
- 3. Identify the alternatives Ozark Industries might consider so it can supply its customers with all the product they demand.
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Marwick Innovations, Inc. produces exercise and fitness gear. Two of its newer products require a finishing process that can only be completed on machines that were recently purchased for this purpose. The machines have a maximum capacity of 10,500 machine hours, and no other products that the company makes use these machines.Sarah Jacob, the company’s operations manager, is preparing the production schedule for the coming month and can’t seem to find enough machine time to produce enough units to meet the customer demand that the marketing department has included in the sales budget.Michael Stoner, the company’s controller, has gathered the following information about the two products:
DumbbellRack
WeightBench
Selling price per unit
$50
$60
Direct materials
20
12
Direct labor
6
12
Variable overhead
3
6
Fixed overhead
5
10
Profit per unit
$16
$20
Unit sales demand
5,000…
Marwick Innovations, Inc. produces exercise and fitness gear. Two of its newer products require a finishing process that can only be completed on machines that were recently purchased for this purpose. The machines have a maximum capacity of 10,500 machine hours, and no other products that the company makes use these machines.Sarah Jacob, the company’s operations manager, is preparing the production schedule for the coming month and can’t seem to find enough machine time to produce enough units to meet the customer demand that the marketing department has included in the sales budget.Michael Stoner, the company’s controller, has gathered the following information about the two products:
DumbbellRack
WeightBench
Selling price per unit
$50
$60
Direct materials
20
12
Direct labor
6
12
Variable overhead
3
6
Fixed overhead
5
10
Profit per unit
$16
$20
Unit sales demand
5,000…
Marwick Innovations, Inc. produces exercise and fitness gear. Two of its newer products require a finishing process that can only be completed on machines that were recently purchased for this purpose. The machines have a maximum capacity of 10,500 machine hours, and no other products that the company makes use these machines.Sarah Jacob, the company’s operations manager, is preparing the production schedule for the coming month and can’t seem to find enough machine time to produce enough units to meet the customer demand that the marketing department has included in the sales budget.Michael Stoner, the company’s controller, has gathered the following information about the two products:
DumbbellRack
WeightBench
Selling price per unit
$50
$60
Direct materials
20
12
Direct labor
6
12
Variable overhead
3
6
Fixed overhead
5
10
Profit per unit
$16
$20
Unit sales demand
5,000…
Chapter 14 Solutions
MANAGERIAL ACCOUNTING-CUSTOM EBOOK>I<
Ch. 14 - Prob. 1RQCh. 14 - Describe the managerial accountants role in the...Ch. 14 - Distinguish between qualitative and quantitative...Ch. 14 - Prob. 4RQCh. 14 - A quantitative analysis enables a decision maker...Ch. 14 - Prob. 6RQCh. 14 - Prob. 7RQCh. 14 - Prob. 8RQCh. 14 - Is the book value of inventory on hand a relevant...Ch. 14 - Why might a manager exhibit a behavioral tendency...
Ch. 14 - Prob. 11RQCh. 14 - Prob. 12RQCh. 14 - Prob. 13RQCh. 14 - Prob. 14RQCh. 14 - Prob. 15RQCh. 14 - Briefly describe the proper approach for making a...Ch. 14 - Prob. 17RQCh. 14 - Are allocated joint processing costs relevant when...Ch. 14 - Briefly describe the proper approach to making a...Ch. 14 - What is meant by the term contribution margin per...Ch. 14 - How is sensitivity analysis used to cope with...Ch. 14 - There is an important link between decision making...Ch. 14 - List four potential pitfalls in decision making,...Ch. 14 - Why can unitized fixed costs cause errors in...Ch. 14 - Prob. 25RQCh. 14 - Prob. 26RQCh. 14 - Are the concepts underlying a relevant-cost...Ch. 14 - Prob. 28RQCh. 14 - Redo Exhibit 144 without the irrelevant data.Ch. 14 - Valley Pizzas owner bought his current pizza oven...Ch. 14 - Lamont Industries produces chemicals for the...Ch. 14 - Day Street Delis owner is disturbed by the poor...Ch. 14 - Prob. 35ECh. 14 - Intercontinental Chemical Company, located in...Ch. 14 - Intercontinentals special order also requires...Ch. 14 - Fusion Metals Company is considering the...Ch. 14 - Prob. 39ECh. 14 - Zytel Corporation produces cleaning compounds and...Ch. 14 - Duo Company manufactures two products, Uno and...Ch. 14 - Refer to the data given in the preceding exercise...Ch. 14 - Southern California Chemical Company manufactures...Ch. 14 - Kitchen Magician, Inc. has assembled the following...Ch. 14 - Prob. 45PCh. 14 - Prob. 46PCh. 14 - Tipton One-Stop Decorating sells paint and paint...Ch. 14 - Carpenters Mate, Inc. manufactures electric...Ch. 14 - Casting Technology Resources (CTR) has purchased...Ch. 14 - The Midwest Division of the Paibec Corporation...Ch. 14 - Prob. 51PCh. 14 - Prob. 52PCh. 14 - Upstate Mechanical, Inc. has been producing two...Ch. 14 - Chenango Industries uses 10 units of part JR63...Ch. 14 - Miami Industries received an order for a piece of...Ch. 14 - Prob. 56PCh. 14 - Ozark Industries manufactures and sells three...Ch. 14 - Prob. 58PCh. 14 - Deru Chocolate Company manufactures two popular...Ch. 14 - Prob. 60PCh. 14 - Prob. 61PCh. 14 - Bo Vonderweidt, the production manager for...Ch. 14 - Alberta Gauge Company, Ltd., a small manufacturing...
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