Akimoto’s Bicycle Co assembles three types of bicycles: Charger, Sublime, Kidde. Due to their residential location they operate with one 8 hour shift, 5 days per week, 50 weeks a year. Balancing the bikes is the bottleneck. The information about production time and costs for these three bicycles are (Refer the attached image)How many of each bicycle should be produced to maximize profits?What qualitative factors would you need to consider? ChargerSublimeKiddeHours to produceSelling price21.750.5$600$300$200$ 50$ 75$ 25Direct material$100$ 75Direct labor$150$100$ 50$ 25$ 25$ 25Variable overheadFixed overhead$ 20

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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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Akimoto’s Bicycle Co assembles three types of bicycles: Charger, Sublime, Kidde. Due to their residential location they operate with one 8 hour shift, 5 days per week, 50 weeks a year. Balancing the bikes is the bottleneck. The information about production time and costs for these three bicycles are (Refer the attached image)

How many of each bicycle should be produced to maximize profits?
What qualitative factors would you need to consider?

Charger
Sublime
Kidde
Hours to produce
Selling price
2
1.75
0.5
$600
$300
$200
$ 50
$ 75
$ 25
Direct material
$100
$ 75
Direct labor
$150
$100
$ 50
$ 25
$ 25
$ 25
Variable overhead
Fixed overhead
$ 20

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