Blossom, Inc., is a small company that manufactures three versions of patio tabl
ID: 2417417 • Letter: B
Question
Blossom, Inc., is a small company that manufactures three versions of patio tables. Unit information for its products follows:Sales price $ 43 $ 47 $ 61 Direct materials 7 8 9 Direct labor 1 3 7 Variable manufacturing overhead 3 3 3 Fixed manufacturing overhead 8 8 8 Required number of labor hours 0.5 0.5 1 Required number of machine hours 4.0 2.50 2.0
Blossom has determined that it can sell a limited number of each table in the upcoming year. Expected demand for each model follows:
Table A 50,000 units Table B 30,000 units Table C 20,000 units
Required: 1. Suppose that direct labor hours has been identified as the bottleneck resource. Determine how Blossom should prioritize production by rank ordering the products from 1 to 3.
If Blossom has only 45,000 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.)
3. 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.
4. If Blossom has only 235,000 machine 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.)
Blossom, Inc., is a small company that manufactures three versions of patio tables. Unit information for its products follows:
Sales price $ 43 $ 47 $ 61 Direct materials 7 8 9 Direct labor 1 3 7 Variable manufacturing overhead 3 3 3 Fixed manufacturing overhead 8 8 8 Required number of labor hours 0.5 0.5 1 Required number of machine hours 4.0 2.50 2.0
Blossom has determined that it can sell a limited number of each table in the upcoming year. Expected demand for each model follows:
Table A 50,000 units Table B 30,000 units Table C 20,000 units
Required: 1. Suppose that direct labor hours has been identified as the bottleneck resource. Determine how Blossom should prioritize production by rank ordering the products from 1 to 3.
If Blossom has only 45,000 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.)
3. 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.
4. If Blossom has only 235,000 machine 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.)
Sales price $ 43 $ 47 $ 61 Direct materials 7 8 9 Direct labor 1 3 7 Variable manufacturing overhead 3 3 3 Fixed manufacturing overhead 8 8 8 Required number of labor hours 0.5 0.5 1 Required number of machine hours 4.0 2.50 2.0
Blossom has determined that it can sell a limited number of each table in the upcoming year. Expected demand for each model follows:
Table A 50,000 units Table B 30,000 units Table C 20,000 units
Required: 1. Suppose that direct labor hours has been identified as the bottleneck resource. Determine how Blossom should prioritize production by rank ordering the products from 1 to 3.
If Blossom has only 45,000 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.)
3. 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.
4. If Blossom has only 235,000 machine 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.)
Sales price $ 43 $ 47 $ 61 Direct materials 7 8 9 Direct labor 1 3 7 Variable manufacturing overhead 3 3 3 Fixed manufacturing overhead 8 8 8 Required number of labor hours 0.5 0.5 1 Required number of machine hours 4.0 2.50 2.0
Explanation / Answer
Particulars Amount (in $) Table A Table B Table C Sales price 43.00 47.00 61.00 Less: Variable Costs Direct Material 7.00 8.00 9.00 Direct Labour 1.00 3.00 7.00 Variable Manufacturing Overhead 3.00 3.00 3.00 Total Variable Costs 11.00 14.00 19.00 Contribution 32.00 33.00 42.00 Less: Fixed Costs Fixed manufacturing overhead 8.00 8.00 8.00 Total Profit 24.00 25.00 34.00 Required number of labor hours 0.5 0.5 1 Contribution per Labour Hour 64.00 66.00 42.00 Order of Preference 2 1 3 Maximum Sales of Each Tables 50000 30000 20000 Number of Tables to be produced to maximize profit in 45000 direct labour hours 50000 30000 5000 Number of Labour hours required to produce the said tables 25000 15000 5000 Required number of machine hours 4.00 2.50 2.00 Contribution per Machine Hour 8.00 13.20 21.00 Order of Preference 3 2 1 Maximum Sales of Each Tables 50000 30000 20000 Number of Tables to be produced to maximize profit in 235000 Machine hours 30000 30000 20000 Number of Machine hours required to produce the said tables 120000 75000 40000