I\'m stuck help please Stora way p o ,ces plast c storage bins for household sto
ID: 2525829 • Letter: I
Question
I'm stuck help please
Stora way p o ,ces plast c storage bins for household storage needs. The company makes two?es 1 b s "ge 50 gai and R dw 35 galon Des nand Ir th produt used to be so hi ht the company could s a as m my of each wz , anR machinery is available for only 2,800 hours pet peiod The company can produce 12 Large bins every hour compared to 16 Regular bins in the same amount of time Fixed expenses amount to $120,000 per peciod Product mix dat uk produce e same ma inery ? used to pro ce b , ??? he (Cick the icon to v ew the product mix analysis? kte kon to viene og eratng income from the pinal product mix Assume that demand for Regular bies is imted to 38 400 units and demand for Large bis s limed 1 22000 unts 1. How many of each sine bin should the company make now? 2. Given this product mix, what wil be compay's operaing lncome? Explain why the eperating income is less than t was wesn the comgany was producing its optimal product mix 1. How many of each size bin should the compay make now? This bs a product mix decision. First determine which bin size Store/way should emphasize ofice bins since they ce size bins Product Mix Analysis Dedsion Storelway should preduce Regular size bis andLage size tis . Given the product mo determined abovk, calculate the company's operating income 840 3 00 Sales price per un Less. Variable cast per unit Contribution margin per unit Unts pee machine hou Contrbotion magn per machine hour 5 00 Operating Income from Prodact Mix Large 8640 6960 Operating incm Operating Income from Optimal Produce Mix 3 Explain wy the eperaing income is bras than it was when the compaty was producing its opimal product mi Operating income i& less than it was wben StoreAway ars peoducing its optinal product mix bacause 4,800 5-10 241920 Number of bins per period Contribution margin per bin O A. ths cempany had vo give us soms of the Reguiar bin costrisution margin per machine hour ie ordar to produce Large binsTotal cortitution magis O B. the company hed to produce tewer Regdar she tins to match demand ior is bins O C. A and B ? D. None otte above Less Ived expensas s 121.920 Operaing incama Print Done Choose trom any ist or enter any number in the irput fields ane then continue to the next questionExplanation / Answer
1) As per reference Regular Production Contribution Margin per machine hour higher than Large
Production Contribution Margin per machine hour.
No. of bins Produce in Regular :-
= Total Hours * Production in one Hour
= 2800 * 16
= 44800 bins
2)
3) The Answer is "C"
Particulars Amount($) Sales (44800*$8.40) 376320 Less : Variable Cost (44800*$3) 134400 Contribution Margin 241920 Less : Fixed Cost (120000) Operating Income 121920