10. Rough Stuff makes 2 products: khaki shorts and khaki pants for men. Each product passes through the cutting machine area, which is the chief constraint during production. Khaki shorts take 15 minutes on the cutting machine and have a contribution margin per pair of shorts of $16. Khaki pants take 24 minutes on the cutting machine and have a contribution margin per pair of pants of $32. PLEASE NOTE: All dollar amounts are rounded to whole dollars and shown with "$" and commas as needed (i.e. $12,345). For khaki pants and khaki shorts, use commas as needed (i.e. 1,234). Part A: If it is assumed that Rough Stuff has 4,800 hours available on the cutting machine to service a minimum demand for each product of 3,000 units, how much will profits increase if 100 more hours of machine time can be obtained? [HINT - You should convert the hours to minutes.] What is the contribution margin per the constrained resource for khaki pants? . What is the contribution margin per the constrained resource for khaki shorts? . Given the answers to the first two questions, which product gets all of the additional 100 hours? . Please note: Your answer is either "Khaki Pants" or "Khaki Shorts" - capital first letters and no quotes. Part B: If it is assumed that Rough Stuff has 4,800 hours available on the cutting machine to service a minimum demand for each product of 3,000 units, how many of each product should be made? [HINT - You should convert the hours to minutes.] Given the 4,800 available hours, how many khaki shorts should Rough Stuff make? Given the 4,800 available hours, how many khaki pants should Rough Stuff make?

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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10. Rough Stuff makes 2 products: khaki shorts and khaki pants for men. Each product passes through the cutting machine area, which is the chief constraint during production. Khaki shorts take 15 minutes on the cutting machine and have a contribution margin per pair of shorts of $16. Khaki pants take 24 minutes on the cutting machine and have a contribution margin per pair of pants of $32.

PLEASE NOTE: All dollar amounts are rounded to whole dollars and shown with "$" and commas as needed (i.e. $12,345). For khaki pants and khaki shorts, use commas as needed (i.e. 1,234).

Part A: If it is assumed that Rough Stuff has 4,800 hours available on the cutting machine to service a minimum demand for each product of 3,000 units, how much will profits increase if 100 more hours of machine time can be obtained? [HINT - You should convert the hours to minutes.]

What is the contribution margin per the constrained resource for khaki pants? .
What is the contribution margin per the constrained resource for khaki shorts? .
Given the answers to the first two questions, which product gets all of the additional 100 hours? . Please note: Your answer is either "Khaki Pants" or "Khaki Shorts" - capital first letters and no quotes.

Part B: If it is assumed that Rough Stuff has 4,800 hours available on the cutting machine to service a minimum demand for each product of 3,000 units, how many of each product should be made? [HINT - You should convert the hours to minutes.]

Given the 4,800 available hours, how many khaki shorts should Rough Stuff make?
Given the 4,800 available hours, how many khaki pants should Rough Stuff make?

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