9-24 Capacity management. The following information is available concerning a one-product company:■ Sales: 10,000 units a year.■ The machine complex can operate a maximum of 8 hours a day.■ The company can operate a maximum of 250 days a year.■ The maximum production per day is 24 units.■ The company is capable of processing 2,000 kg of raw material a year. One kg of raw material yieldstwo finished products.■ One worker produces one product per hour. A maximum of six workers can be employed. The workingtime per day is 8 hours. The normal capacity utilization is 100% of maximum capacity.1. Which production factor is a bottleneck? What is the normal capacity utilization for this company?2. Calculate the cost per product.

The production factor which halts the production or which causes a barriers to the production is the…

Answered: 1. Which production factor is a…

1. Which production factor is a bottleneck? What is the normal capacity utilization for this company? 2. Calculate the cost per product.

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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Question

9-24 Capacity management. The following information is available concerning a one-product company:
■ Sales: 10,000 units a year.
■ The machine complex can operate a maximum of 8 hours a day.
■ The company can operate a maximum of 250 days a year.
■ The maximum production per day is 24 units.
■ The company is capable of processing 2,000 kg of raw material a year. One kg of raw material yields
two finished products.
■ One worker produces one product per hour. A maximum of six workers can be employed. The working
time per day is 8 hours. The normal capacity utilization is 100% of maximum capacity.
1. Which production factor is a bottleneck? What is the normal capacity utilization for this company?
2. Calculate the cost per product.

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