Blossom, Inc., is a small company that manufactures three versions of patio tabl

Question

Blossom, Inc., is a small company that manufactures three versions of patio tables. Unit information for its products follows:

    

If Blossom has only 40,000 direct labor hours available, calculate the number of units of each table that Blossom should produce to maximize its profit. (Enter the products in the sequence of their preferences; the product with first preference should be entered first.)

Suppose that the number of machine hours has been identified as the most constrained resource. Determine how Blossom should prioritize production by rank ordering the products from 1 to 3.

Table A Table B Table C   Sales price $ 40 $ 44 $ 58   Direct materials   6 7 8   Direct labor 1 3 7   Variable manufacturing overhead 2 2 2   Fixed manufacturing overhead 5 5 5   Required number of labor hours 0.5 0.5 1   Required number of machine hours 4.0 2.50 2.0

Explanation / Answer

a)

caculation of contribution per direct labour hour

b) total direct labour hours avilable =40,000

table b production units = 50,000*0.5=25,000

table a production units = (40,000-25,000)= 15,000/0.5= 30,000 units produced for maximization of profit

c)

caculation of contribution per machine hours

d)

total direct mchine hours avilable =232,000

table c production units required hours=50000*2=100,000 machine hours

table b production units = 50,000*2.5= 125,000 machine hours

table a production units = 232,000(50,000*2.5+50,000*2.0)/4= 7,000/4=1,750 units

particulars table A table B table C sale price $ 40 $ 44 $ 58 less variable cost direct materials $ 6 $ 7 $ 8 direct labour $ 1 $ 3 $ 7 variable manufacturing overhead $ 2 $ 2 $ 2 contribution $ 31 $ 32 $ 41 contribution per direct labour hour $ 62 $ 64 $ 41 ranking as direct labour hours as bottleneck 2 1 3

Related Questions

Navigate

• Browse (All)
• Browse B
• Subjects

---