E7-16 (Algo) Making Decisions Involving Constrained Resource [LO 7-2, 7-7] Cordova manufactures three types of stained glass windows, cleverly named Products A, B, and C. Information about these products follows: Sales price Variable costs per unit Fixed costs per unit Required number of labor hours Product A $ 46.00 22.00 Product B $ 56.00 12.25 Product C $ 86.00 38.00 8.00 1.50 8.00 2.50 8.00 4.00 4 Cordova currently is limited to 50,000 labor hours per month. Cordova's marketing department has determined the following demand for its products: Product A 13,000 units Product B Product C Required: 9,000 units 5,000 units Given the company's limited resource and expected demand, compute how many units of each product Cordova should produce to maximize its profit. Note: Enter the products in the sequence of their preferences; the product with first preference should be entered first. Round your answers to the nearest whole number. Product Units Produced

E7-16 (Algo) Making Decisions Involving Constrained Resource [LO 7-2, 7-7] Cordova manufactures three types of stained glass windows, cleverly named Products A, B, and C. Information about these products follows: Sales price Variable costs per unit Fixed costs per unit Required number of labor hours Product A $ 46.00 22.00 Product B $ 56.00 12.25 Product C $ 86.00 38.00 8.00 1.50 8.00 2.50 8.00 4.00 4 Cordova currently is limited to 50,000 labor hours per month. Cordova's marketing department has determined the following demand for its products: Product A 13,000 units Product B Product C Required: 9,000 units 5,000 units Given the company's limited resource and expected demand, compute how many units of each product Cordova should produce to maximize its profit. Note: Enter the products in the sequence of their preferences; the product with first preference should be entered first. Round your answers to the nearest whole number. Product Units Produced

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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Product Decisions Under Bottlenecked Operations Youngstown Glass Company manufactures three types of safety plate glass: large, medium, and small. All three products have high demand. Thus, Youngstown Glass is able to sell all the safety glass it can make. The production process includes an autoclave operation, which is a pressurized heat treatment. The autoclave is a production bottleneck. Total fixed costs are $158,000 for the company as a whole. In addition, the following information is available about the three products: Large Medium Small Unit selling price $235 $429 $149 Unit variable cost 185 351 131 Unit contribution margin $ 50 $ 78 $ 18 Autoclave hours per unit 4 6 2 Total process hours per unit 8 12 6 Budgeted units of production 2,400 2,400 2,400 a. Determine the contribution margin by glass type and the total company income from operations for the budgeted units of production. Large Medium Small Total Units…
Product Decisions Under Bottlenecked Operations Youngstown Glass Company manufactures three types of safety plate glass: large, medium, and small. All three products have high demand. Thus, Youngstown Glass is able to sell all the safety glass it can make. The production process includes an autoclave operation, which is a pressurized heat treatment. The autoclave is a production bottleneck. Total fixed costs are $296,000 for the company as a whole. In addition, the following information is available about the three products: Large Medium Small Unit selling price $324 $286 $158 Unit variable cost 255 234 139 Unit contribution margin $ 69 $ 52 $ 19 Autoclave hours per unit 6 4 2 Total process hours per unit 18 8 6 Budgeted units of production 4,700 4,700 4,700 a. Determine the contribution margin by glass type and the total company income from operations for the budgeted units of production. Large Medium Small Total Units…
! Required information Self-Study Problem 11-2 (Algo) The Make-vs.-Buy Decision [The following information applies to the questions displayed below.] Highvalu Incorporated manufactures a moderately priced set of lawn furniture (a table and four chairs) that it sells for $320. The company currently manufactures and sells 7,900 sets per year. The manufacturing costs include $104 for direct materials and $64 for direct labor per set. The overhead charge per set is $54, which consists entirely of fixed costs. Assume that Highvalu currently purchases the chair cushions for its lawn set from an outside vendor for $21 per set. HighValu's chief operations officer wants an analysis of the comparative costs of manufacturing these cushions to determine whether bringing the manufacturing in-house would save the company money. Additional information shows that if HighValu were to manufacture the cushions, the direct materials cost would be $8 and the direct labor cost would be $6 per set. In…
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Variable costs: Direct materials $0.15 Direct labor 0.06 Variable overhead 0.11 Fixed overhead 0.30 Total cost $0.62
Product Decisions Under Bottlenecked Operations Youngstown Glass Company manufactures three types of safety plate glass: large, medium, and small. All three products have high demand. Thus, Youngstown Glass is able to sell all the safety glass it can make. The production process includes an autoclave operation, which is a pressurized heat treatment. The autoclave is a production bottleneck. Total fixed costs are $177,000 for the company as a whole. In addition, the following information is available about the three products: Large Medium Small Unit selling price $353 $99 $282 Unit variable cost 278 81 248 Unit contribution margin $ 75 $ 18 $ 34 Autoclave hours per unit 6 2 4 Total process hours per unit 18 6 8 Budgeted units of production 3,100 3,100 3,100 a. Determine the contribution margin by glass type and the total company income from operations for the budgeted units of production. Large Medium Small Total Units…
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Outsourcing (Make-or-Buy) Decision Mountain Air Limited manufactures a line of room air purifiers. Management is currently evaluating the possible production of an air purifier for automobiles. Based on an annual volume of 10,000 units, the predicted cost per unit of an auto air purifier follows. Direct materials $9.00 Direct labor 1.40 Factory overhead 10.00 Total $ 20.40 These cost predictions include $80,000 in fixed factory overhead averaged over 10,000 units. The completed air purifier units include a battery-operated electric motor, which Mountain Air assembles with parts purchased from an outside vendar for $2.00 per motor. Mini Motor Company has offered to supply an assembled battery operated motor at a cost of $5.50 per unit, with a minimum annual order of 5,000 units. If Mountain Air accepts this offer, it will be able to reduce the variable labor and variable overhead casts of the auto air purifier by 50 percent. (a) Determine whether Mountain Air should continue to make the…
ok nces E5-18 (Algo) Calculating Contribution Margin and Contribution Ratio, Preparing Contribution Margin Income Statement [LO 5-5] Riverside Incorporated makes one model of wooden canoe. Partial Information for it follows: Number of Canoes Produced and Sold Total costs Variable costs Fixed costs Total costs Cost per unit Variable cost per unit Fixed cost per unit Total cost per unit Unit contribution margin Contribution margin ratio Sales revenue Variable costs Gross margin Fixed costs Contribution margin Cost of goods sold Variable costs Gross margin Net operating income Scenario 1 Raises Sales Price to $730 per Canoe $ 550 540.00 $ 104,500 198,000 $ 302,500 $ 190.00 360.00 $ 550.00 Riverside sells Its canoes for $630 each. Next year Riverside expects to sell 1,000 canoes Required: Complete the Riverside's contribution margin Income statement for each independent scenario. Assuming each scenario is a variation of Riverside's original data. Note: Round your unit contribution margin…
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Outsourcing (Make-or-Buy) Decision Mountain Air Limited manufactures a line of room air purifiers. Management is currently evaluating the possible production of an air purifier for automobiles. Based on an annual volume of 10,000 units, the predicted cost per unit of an auto air purifier follows. Direct materials $8.00 Direct labor 1.50 Factory overhead 7.00 Total $16.50 These cost predictions include $40,000 in facility-level fixed factory overhead averaged over 10,000 units. One of the component parts of the auto air purifier is a battery-operated electric motor. Although the company does not currently manufacture these motors, the preceding cost predictions are based on the assumption that it will assemble such a motor. Mini Motor Company has offered to supply an assembled battery-operated motor at a cost of $4.50 per unit, with a minimum annual order of 5,000 units. If Mountain Air accepts this offer, it will be able to reduce the variable labor and variable overhead costs of…