A company makes four products that have the following characteristics: Product A sells for $75 but needs $40 of materials to produce; Product B sells for $90 but needs $65 of materials to produce; Product C sells for $110 but needs $80 of materials to produce; Product D sells for $135 but needs $105 of materials to produce. The processing requirements for each product on each of the four machines are shown in the table. Processing Time (min/unit) A Work Center W 8 4 12 10 14 10 12 8 10 9 12 9 6. Y Vork centers W, X, Y, and Z are available for 5 days per week, 1 shift per day (8 hrs.) and have no setup me when switching between products. Market demand is 50 As, 60 Bs, 70 Cs, and 80 Ds per week. In the uestions that follow, the traditional method refers to maximizing the contribution margin per unit for ach product, and the bottleneck method refers to maximizing the contribution margin per minute at the ottleneck for each product. Each worker is paid $15 per hour and is paid for an entire week, regardless f how much the worker is used.

A company makes four products that have the following characteristics: Product A sells for $75 but needs $40 of materials to produce; Product B sells for $90 but needs $65 of materials to produce; Product C sells for $110 but needs $80 of materials to produce; Product D sells for $135 but needs $105 of materials to produce. The processing requirements for each product on each of the four machines are shown in the table. Processing Time (min/unit) A Work Center W 8 4 12 10 14 10 12 8 10 9 12 9 6. Y Vork centers W, X, Y, and Z are available for 5 days per week, 1 shift per day (8 hrs.) and have no setup me when switching between products. Market demand is 50 As, 60 Bs, 70 Cs, and 80 Ds per week. In the uestions that follow, the traditional method refers to maximizing the contribution margin per unit for ach product, and the bottleneck method refers to maximizing the contribution margin per minute at the ottleneck for each product. Each worker is paid $15 per hour and is paid for an entire week, regardless f how much the worker is used.

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

Manufacturing Costs

Manufacturing cost is the total cost of procuring or producing a product. In other words, the manufacturing cost is the cost that an individual or business owner undertakes for the manufacturing of goods.

Question

100%

A company makes four products that have the following characteristics:
Product A sells for $75 but needs $40 of materials to produce; Product B sells for $90 but needs $65 of
materials to produce; Product C sells for $110 but needs $80 of materials to produce; Product D sells for
$135 but needs $105 of materials to produce. The processing requirements for each product on each of
the four machines are shown in the table.
Processing Time (min/unit)
A
Work
Center
W
8
4
12
10
14
10
12
8
10
9
12
9
6.
Y
Vork centers W, X, Y, and Z are available for 5 days per week, 1 shift per day (8 hrs.) and have no setup
me when switching between products. Market demand is 50 As, 60 Bs, 70 Cs, and 80 Ds per week. In the
uestions that follow, the traditional method refers to maximizing the contribution margin per unit for
ach product, and the bottleneck method refers to maximizing the contribution margin per minute at the
ottleneck for each product. Each worker is paid $15 per hour and is paid for an entire week, regardless
f how much the worker is used.

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