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 Table A $44 8 1 3 9 0.50 4.00 Table B $ 48 9 3 3 9 0.50 2.50 Table C $ 62 10 7 3 9 1.00 2.00 Blossom has determined it can sell a limited number of each table in the upcoming year. Expected demand for each model follows: Table A Table B Table C 50,000 units 30,000 units 20,000 units Required: 1. Suppose direct labor hours have been identified as the bottleneck resource. Determine how Blossom should prioritize production. by rank, Le., 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, Le, ordering the products from 1 to 3. 4. If Blossom has only 236,000 machine hours available, calculate the number of units of each table Blossom should produce to maximize its profit
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 Table A $44 8 1 3 9 0.50 4.00 Table B $ 48 9 3 3 9 0.50 2.50 Table C $ 62 10 7 3 9 1.00 2.00 Blossom has determined it can sell a limited number of each table in the upcoming year. Expected demand for each model follows: Table A Table B Table C 50,000 units 30,000 units 20,000 units Required: 1. Suppose direct labor hours have been identified as the bottleneck resource. Determine how Blossom should prioritize production. by rank, Le., 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, Le, ordering the products from 1 to 3. 4. If Blossom has only 236,000 machine hours available, calculate the number of units of each table Blossom should produce to maximize its profit
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text: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
Table A
$44
8
1
3
9
0.50
4.00
Table 8.
$ 48
9
3
3
9
0.50
2.50
Table C
$ 62
10
7
3
9
1.00
2.00
Blossom has determined it can sell a limited number of each table in the upcoming year. Expected demand for each model follows:
Table A
Table B
Table C
50,000 units
30,000 units
20,000 units
Required:
1. Suppose direct labor hours have been identified as the bottleneck resource. Determine how Blossom should prioritize production.
by rank, Le., 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, Le ordering the products from 1 to 3.
4.
If Blossom has only 236,000 machine hours available, calculate the number of units of each table Blossom should produce to
maximize its profit
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