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Exhibit 4 - Resource Allocation Happiland is dealing with some capacity challenges in their candy division. They currently produce three types of sour candies, Sugarbombs, Cherrysqueezes, and Sourblasters. They all use the same type of sour flavouring, "Xsour", and there have been challenges getting that flavouring. The company is unsure of which to produce, and so have been basing their production on demand numbers (ie Sugarbombs first then the other two). The Xsour costs $5 per KG and Happiland can only procure 245 KG of Xsour. They must produce a minimum of 100 bags of each type of candy. They are unsure how to proceed to determine the optimal production structure subject to these constraints. Requirement: Provide the optimal production schedule for the candy division. Sugarbombs Cherrysqueezes Sourblasters Selling price per bag $5.50 $4.50 $7.00 Demand (in bags) 2000 1000 1000 Variable costs/bag 4.00 3.50 4.50 Fixed costs/bag .75 .50 .65 KG of Xsour per bag 0.05 0.25 0.10 Minimum bags 100 100 100 produced Requirement: Provide the optimal production schedule for the candy division.

Exhibit 4 - Resource Allocation Happiland is dealing with some capacity challenges in their candy division. They currently produce three types of sour candies, Sugarbombs, Cherrysqueezes, and Sourblasters. They all use the same type of sour flavouring, "Xsour", and there have been challenges getting that flavouring. The company is unsure of which to produce, and so have been basing their production on demand numbers (ie Sugarbombs first then the other two). The Xsour costs $5 per KG and Happiland can only procure 245 KG of Xsour. They must produce a minimum of 100 bags of each type of candy. They are unsure how to proceed to determine the optimal production structure subject to these constraints. Requirement: Provide the optimal production schedule for the candy division. Sugarbombs Cherrysqueezes Sourblasters Selling price per bag $5.50 $4.50 $7.00 Demand (in bags) 2000 1000 1000 Variable costs/bag 4.00 3.50 4.50 Fixed costs/bag .75 .50 .65 KG of Xsour per bag 0.05 0.25 0.10 Minimum bags 100 100 100 produced Requirement: Provide the optimal production schedule for the candy division.

FINANCIAL ACCOUNTING
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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Exhibit 4 - Resource Allocation Happiland is dealing with some capacity challenges in their candy division. They currently produce three types of sour candies, Sugarbombs, Cherrysqueezes, and Sourblasters. They all use the same type of sour flavouring, "Xsour", and there have been challenges getting that flavouring. The company is unsure of which to produce, and so have been basing their production on demand numbers (ie Sugarbombs first then the other two). The Xsour costs $5 per KG and Happiland can only procure 245 KG of Xsour. They must produce a minimum of 100 bags of each type of candy. They are unsure how to proceed to determine the optimal production structure subject to these constraints. Requirement: Provide the optimal production schedule for the candy division. Sugarbombs Cherrysqueezes Sourblasters Selling price per bag $5.50 $4.50 $7.00 Demand (in bags) 2000 1000 1000 Variable costs/bag 4.00 3.50 4.50 Fixed costs/bag .75 .50 .65 KG of Xsour per bag 0.05 0.25 0.10 Minimum bags 100 100 100 produced Requirement: Provide the optimal production schedule for the candy division.
Transcribed Image Text:Exhibit 4 - Resource Allocation Happiland is dealing with some capacity challenges in their candy division. They currently produce three types of sour candies, Sugarbombs, Cherrysqueezes, and Sourblasters. They all use the same type of sour flavouring, "Xsour", and there have been challenges getting that flavouring. The company is unsure of which to produce, and so have been basing their production on demand numbers (ie Sugarbombs first then the other two). The Xsour costs $5 per KG and Happiland can only procure 245 KG of Xsour. They must produce a minimum of 100 bags of each type of candy. They are unsure how to proceed to determine the optimal production structure subject to these constraints. Requirement: Provide the optimal production schedule for the candy division. Sugarbombs Cherrysqueezes Sourblasters Selling price per bag $5.50 $4.50 $7.00 Demand (in bags) 2000 1000 1000 Variable costs/bag 4.00 3.50 4.50 Fixed costs/bag .75 .50 .65 KG of Xsour per bag 0.05 0.25 0.10 Minimum bags 100 100 100 produced Requirement: Provide the optimal production schedule for the candy division.
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