Blossom Industries manufactures and sells three different models of wet-dry shop vacuum cleaners. Although the shop vacs vary in terms of quality and features, all are good sellers. Blossom is currently operating at full capacity with limited machine time. Per unit sales and production information relevant to each model follows. Selling price Variable costs and expenses Machine hours required Economy $32 $17 0.50 Product Standard $53 $21 0.80 Deluxe $105 $49 1.60 Calculate unit contribution margin.

Blossom Industries manufactures and sells three different models of wet-dry shop vacuum cleaners. Although the shop vacs vary in terms of quality and features, all are good sellers. Blossom is currently operating at full capacity with limited machine time. Per unit sales and production information relevant to each model follows. Selling price Variable costs and expenses Machine hours required Economy $32 $17 0.50 Product Standard $53 $21 0.80 Deluxe $105 $49 1.60 Calculate unit contribution margin.

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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Portsmouth Company makes upholstered furniture. Its only variable cost is direct materials. The demand for the company's products far exceeds its manufacturing capacity. The bottleneck (or constraint) in the production process is upholstery labor-hours. Information concerning three of Portsmouth's products appears below: Selling price per unit Variable cost per unit Upholstery labor-hours per unit Recliner $ 1,128 $ 750 Required 1 Required 2 7 hours Required 3 Complete this question by entering your answers in the tabs below. Sofa $ 1,750 $ 1,200 10 hours Required: 1. Portsmouth is considering paying its upholstery laborers hourly compensation, in addition to their usual salaries, to work overtime. Assuming that this extra time would be used to produce sofas, up to how much of an overtime rate per hour should the company be willing to pay to keep the upholstery shop open after normal working hours? 2. A small nearby upholstering company has offered to upholster furniture for Portsmouth…
Portsmouth Company makes upholstered furniture. Its only variable cost is direct materials. The demand for the company's products far exceeds its manufacturing capacity. The bottleneck (or constraint) in the production process is upholstery labor-hours. Information concerning three of Portsmouth's products appears below: Selling price per unit Variable cost per unit Upholstery labor-hours per unit Required 1 Required 2 Recliner $ 1,462 $ 850 Required 3 Maximum overtime rate per hour 9 hours Sofa $ 2,060 $ 1,400 Required: 1. Portsmouth is considering paying its upholstery laborers hourly compensation, in addition to their usual salaries, to work overtime. Assuming this extra time would be used to produce sofas, up to how much of an overtime rate per hour should the company be willing to pay to keep the upholstery shop open after normal working hours? 2. A small nearby upholstering company has offered to upholster furniture for Portsmouth at a price of $52 per hour. The management of…
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Portsmouth Company makes upholstered furniture. Its only variable cost is direct materials. The demand for the company's products far exceeds its manufacturing capacity. The bottleneck (or constraint) in the production process is upholstery labor-hours. Information concerning three of Portsmouth's products appears below: Selling price per unit Variable cost per unit Upholstery labor-hours per unit Required 1 Required 2 Required 3 Recliner $ 1,184 $ 800 Complete this question by entering your answers in the tabs below. Additional contribution margin per hour Required: 1. Portsmouth is considering paying its upholstery laborers hourly compensation, in addition to their usual salaries, to work overtime. Assuming that this extra time would be used to produce sofas, up to how much of an overtime rate per hour should the company be willing to pay to keep the upholstery shop open after normal working hours? 2. A small nearby upholstering company has offered to upholster furniture for…
Portsmouth Company makes upholstered furniture. Its only variable cost is direct materials. The demand for the company's products far exceeds its manufacturing capacity. The bottleneck (or constraint) in the production process is upholstery labor-hours. Information concerning three of Portsmouth's products appears below: Selling price per unit Variable cost per unit Upholstery labor-hours per unit Required: Recliner Sofa Love Seat $ 1,254 $ 750 $ 2,065 $ 1,250 $ 1,350 $ 900 9 hours 13 hours 5 hours 1. Portsmouth is considering paying its upholstery laborers hourly compensation, in addition to their usual salaries, to work overtime. Assuming that this extra time would be used to produce sofas, up to how much of an overtime rate per hour should the company be willing to pay to keep the upholstery shop open after normal working hours? 2. A small nearby upholstering company has offered to upholster furniture for Portsmouth at a price of $50 per hour. The management of Portsmouth is…
Sensational Soft Drinks makes three products: iced tea, soda, and lemonade. The following data are available: Line Item Description Iced Tea Soda Lemonade Sales price per unit $0.90 $0.60 $0.50 Variable cost per unit (0.30) (0.15) (0.10) Contribution margin per unit $0.60 $0.45 $0.40 Sensational is experiencing a bottleneck in one of its processes that affects each product as follows: Line Item Description Iced Tea Soda Lemonade Bottleneck process hours per unit 3 3 4 a. Using a theory of constraints (TOC) approach, rank the products in terms of profitability. Rank Product 1. 2. 3. b. What price for lemonade would equate its profitability (contribution margin per bottleneck hour) to that of soda? Round your answer to two decimal places.fill in the blank 1 of 1$