1 answer

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

Question:

Blossom, Inc., is a small company that manufactures three versions of patio tables. Unit information for its products follows
2. If Blossom has only 50,000 direct labor hours available, calculate the number of units of each table that Blossom should p
4. If Blossom has only 244,000 machine hours available, calculate the number of units of each table that Blossom should produ
Blossom, Inc., is a small company that manufactures three versions of patio tables. Unit information for its products follows: Table A $ 52 10 2 4 Table B $ 56 11 Table C Sales price Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead 70 12 4 8 4 4 5 5 5 Required number of labor hours Required number of machine hours 0.5 0.5 2.50 1.0 4.0 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 Table B Table C 50,000 units 25,000 units 25,000 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. Product Ranking Table A Table B Table C np
2. If Blossom has only 50,000 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.) Product Units Produced 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. Product Ranking Table A Table B Table C
4. If Blossom has only 244,000 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.) Product Units Produced

Answers

Answer = 1
CALCULATION OF RANKING OF PRODUCTS IF DIRECT LABOR HRS ARE BOTTLENECK RESOURCES
Table A Table B Table C
Sales Price $                            52 $                             56 $                        70
Less: Variale Costs:
Direct Materials $                            10 $                             11 $                        12
Direct Labor $                               2 $                                4 $                          8
Variable manufacturing overhead $                               5 $                                5 $                          5
Contribution margin per unit $                            35 $                             36 $                        45
Divide By "/" By   "/" By   "/" By  
Number of labor hours                             0.50                              0.50                         1.00
Contribution margin per hours                           70.00                            72.00                      45.00
Ranking of the products 2 nd   1 st   3 rd
Product Ranking  
Table A 2 nd  
Table B 1 st  
Table C 3 rd
Answer = 2
Product Units Prodcued   Hrs
Table A (50,000 units X 0.50 Hrs )                        50,000 25000
Table B (25,000 Units X 0.50 Hrs)                        25,000 12500
Table C (Balance 12,500 units X 1 Hrs)                        12,500 12500
Total                        87,500                         50,000
Answer = 3
CALCULATION OF RANKING OF PRODUCTS IF DIRECT LABOR HRS ARE BOTTLENECK RESOURCES
Table A Table B Table C
Sales Price $                            52 $                             56 $                        70
Less: Variale Costs:
Direct Materials $                            10 $                             11 $                        12
Direct Labor $                               2 $                                4 $                          8
Variable manufacturing overhead $                               5 $                                5 $                          5
Contribution margin per unit $                            35 $                             36 $                        45
Divide By "/" By   "/" By   "/" By  
Number of Machine Hours                             4.00                              2.50                         2.00
Contribution margin per Machine Hours                             8.75                            14.40                      22.50
Ranking of the products 3rd 2 nd   1 st  
Product Ranking  
Table A 3 rd
Table B 2 nd  
Table C 1 st  
Answer = 4
Product Units Prodcued   Hours Utilized
Table A (32,875 units X 4.00 Hrs ) Balance Hours                        32,875                      1,31,500
Table B (25,000 Units X 2.50 M Hrs)                        25,000                         62,500
Table C ( 25,000 units X 2 M Hrs)                        25,000                         50,000
                       82,875                      2,44,000
.

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