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Boyd Wood Company makes a regular and a deluxe grade of wood floors. Regular grade is sold at $9 per square yard, and the deluxe grade is sold at $20 per square yard. The variable cost of making the regular grade is $6 per square yard. It costs an extra $6 per square yard to make the deluxe grade. It takes 15 labor hours to make 100 square yards of the regular grade, and 20 labor hours to make 100 square yards of the deluxe grade. There are 4,000 hours of labor time available for production each week. The maximum weekly sales for the regular and the deluxe model are 25,000 and 5,000 square yards, respectively. Fixed production costs total $450,000 per year. All selling costs are fixed. Requirement What is the optimal production level in number of square yards for each product? Requirement What is the optimal production level in number of square yards for each product? Begin by calculating the contribution margin per direct labor hour for each product grade. (Abbreviations used DLH = Direct labor hour) Regular Deluxe Contribution margin per DLH What is the optimal production level in number of square yards for each product?

Boyd Wood Company makes a regular and a deluxe grade of wood floors. Regular grade is sold at $9 per square yard, and the deluxe grade is sold at $20 per square yard. The variable cost of making the regular grade is $6 per square yard. It costs an extra $6 per square yard to make the deluxe grade. It takes 15 labor hours to make 100 square yards of the regular grade, and 20 labor hours to make 100 square yards of the deluxe grade. There are 4,000 hours of labor time available for production each week. The maximum weekly sales for the regular and the deluxe model are 25,000 and 5,000 square yards, respectively. Fixed production costs total $450,000 per year. All selling costs are fixed. Requirement What is the optimal production level in number of square yards for each product? Requirement What is the optimal production level in number of square yards for each product? Begin by calculating the contribution margin per direct labor hour for each product grade. (Abbreviations used DLH = Direct labor hour) Regular Deluxe Contribution margin per DLH What is the optimal production level in number of square yards for each product?

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Boyd Wood Company makes a regular and a deluxe grade of wood floors. Regular grade is sold at $9 per square yard, and the deluxe grade is sold at $20 per square yard. The variable cost of making the regular grade is $6 per square yard. It costs an extra $6 per square yard to make the deluxe grade. It takes 15 labor hours to make 100 square yards of the regular grade, and 20 labor hours to make 100 square yards of the deluxe grade. There are 4,000 hours of labor time available for production each week. The maximum weekly sales for the regular and the deluxe model are 25,000 and 5,000 square yards, respectively. Fixed production costs total $450,000 per year. All selling costs are fixed. Requirement What is the optimal production level in number of square yards for each product? Requirement What is the optimal production level in number of square yards for each product? Begin by calculating the contribution margin per direct labor hour for each product grade. (Abbreviations used DLH = Direct labor hour) Regular Deluxe Contribution margin per DLH What is the optimal production level in number of square yards for each product?
Transcribed Image Text:Boyd Wood Company makes a regular and a deluxe grade of wood floors. Regular grade is sold at $9 per square yard, and the deluxe grade is sold at $20 per square yard. The variable cost of making the regular grade is $6 per square yard. It costs an extra $6 per square yard to make the deluxe grade. It takes 15 labor hours to make 100 square yards of the regular grade, and 20 labor hours to make 100 square yards of the deluxe grade. There are 4,000 hours of labor time available for production each week. The maximum weekly sales for the regular and the deluxe model are 25,000 and 5,000 square yards, respectively. Fixed production costs total $450,000 per year. All selling costs are fixed. Requirement What is the optimal production level in number of square yards for each product? Requirement What is the optimal production level in number of square yards for each product? Begin by calculating the contribution margin per direct labor hour for each product grade. (Abbreviations used DLH = Direct labor hour) Regular Deluxe Contribution margin per DLH What is the optimal production level in number of square yards for each product?
K Boyd Wood Company makes a regular and a deluxe grade of wood floors. Regular grade is sold at $9 per square yard, and the deluxe grade is sold at $20 per square yard. The variable cost of making the regular grade is $6 per square yard It costs an extra $6 per square yard to make the deluxe grade. It takes 15 labor hours to make 100 square yards of the regular grade, and 20 labor hours to make 100 square yards of the deluxe grade. There are 4,000 hours of labor time available for production each week. The maximum weekly sales for the regular and the deluxe model are 25,000 and 5,000 square yards, respectively. Fixed production costs total $450,000 per year. All selling costs are fixed. Requirement What is the optimal production level in number of square yards for each product? acces Deyni uy Laicuidung une cuinarger per uur ou aci provuce graue. (revidi user. DLH= Direct labor hour) Regular Deluxe Contribution margin per DLH What is the optimal production level in number of square yards for each product? Boyd Wood Company should produce square yards of the available capacity to produce square yards of the first and then use the remaining
Transcribed Image Text:K Boyd Wood Company makes a regular and a deluxe grade of wood floors. Regular grade is sold at $9 per square yard, and the deluxe grade is sold at $20 per square yard. The variable cost of making the regular grade is $6 per square yard It costs an extra $6 per square yard to make the deluxe grade. It takes 15 labor hours to make 100 square yards of the regular grade, and 20 labor hours to make 100 square yards of the deluxe grade. There are 4,000 hours of labor time available for production each week. The maximum weekly sales for the regular and the deluxe model are 25,000 and 5,000 square yards, respectively. Fixed production costs total $450,000 per year. All selling costs are fixed. Requirement What is the optimal production level in number of square yards for each product? acces Deyni uy Laicuidung une cuinarger per uur ou aci provuce graue. (revidi user. DLH= Direct labor hour) Regular Deluxe Contribution margin per DLH What is the optimal production level in number of square yards for each product? Boyd Wood Company should produce square yards of the available capacity to produce square yards of the first and then use the remaining
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