1. Suppose direct labor hours have been identified as the bottleneck resource. Determine how Blossom should prioritize production by rank, i.e., ordering the products from 1 to 3. 2. If Blossom has only 45,000 direct labor hours available, calculate the number of units of each table Blossom should produce to maximize its profit. 3. Suppose the number of machine hours has been identified as the most constrained resource. Determine how Blossom should prioritize production by rank. i.e... ordering the products from 1 to 3.

1. Suppose direct labor hours have been identified as the bottleneck resource. Determine how Blossom should prioritize production by rank, i.e., ordering the products from 1 to 3. 2. If Blossom has only 45,000 direct labor hours available, calculate the number of units of each table Blossom should produce to maximize its profit. 3. Suppose the number of machine hours has been identified as the most constrained resource. Determine how Blossom should prioritize production by rank. i.e... ordering the products from 1 to 3.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Concept explainers

Overheads

In cost accounting, overhead refers to those expenses which occur during the operating of a business. Overhead includes the fixed, variable, or semi-variable which is not directly involved with a company product or service. It is very important to analyze overhead expense as it helps the company in determining how much a company must charge for its products and services so that they can generate profit. Overhead expenses depend upon the nature of the business operations.

Question

100%

Blossom, Incorporated, is a small company that manufactures three versions of patio tables. Unit information for its products follows:
Sales price
Direct materials
Direct labor
Variable manufacturing overhead
Fixed manufacturing overhead
Required number of labor hours.
Required number of machine hours
Required 1 Required 2
Table A
$43
Product
7
1
3
8
Complete this question by entering your answers in the tabs below.
Required 3 Required 4
Table A
Table B
Table C
0.50
4.00
Blossom has determined it can sell a limited number of each table in the upcoming year. Expected demand for each model follows:
Table A
50,000 units
30,000 units
20,000 units
Table B
$ 47
8
3
3
8
Table B
Table C
Required:
1. Suppose direct labor hours have been identified as the bottleneck resource. Determine how Blossom should prioritize production
by rank, i.e., ordering the products from 1 to 3.
2. If Blossom has only 45,000 direct labor hours available, calculate the number of units of each table Blossom should produce to
maximize its profit.
3. Suppose the number of machine hours has been identified as the most constrained resource. Determine how Blossom should
prioritize production by rank, i.e., 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 Blossom should produce to
maximize its profit.
< Required 1
0.50
2.50
Table C
$ 61
9
7
3
8
Suppose direct labor hours have been identified as the bottleneck resource. Determine how Blossom should prioritize
production by rank, i.e., ordering the products from 1 to 3.
Ranking
1.00
2.00
Required 2 >

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