Hydroflask water bottles produces three products, large mouth, small mouth and mini mouth water bottles. The company is currently facing a labor shortage; only 4,800 hours are available this month. The selling prices, costs, labor requirements, and demand for the three products are as follows: Sales price Variable cost per unit Direct labor hours per unit Demand (units) Large Mouth (Product A) $ 70.00 $ 53.00 2.1 1,200 Small Mouth (Product B) $ 38.00 $ 19.00 3.3 1,700 Mini Mouth (Product C) $ 52.00 $48.00 1.7 1,900 Required: a. In what order should Hydroflask prioritize production of the products? b. How many of each product should be produced during the labor shortage to maximize profit? c. What is the total contribution margin if Hydroflask prioritizes production according to its limited resources?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Hydroflask water bottles produces three products, large mouth, small mouth and mini mouth water bottles. The company is currently
facing a labor shortage; only 4,800 hours are available this month. The selling prices, costs, labor requirements, and demand for the
three products are as follows:
Sales price
Variable cost per unit
Direct labor hours per
unit
Demand (units)
Large Mouth (Product A)
$ 70.00
$ 53.00
2.1
1,200
Small Mouth
(Product B)
$ 38.00
$ 19.00
Required A Required B Required C
Complete this question by entering your answers in the tabs below.
3.3
1,700
Required:
a. In what order should Hydroflask prioritize production of the products?
b. How many of each product should be produced during the labor shortage to maximize profit?
c. What is the total contribution margin if Hydroflask prioritizes production according to its limited resources?
In what order should Hanson prioritize production of the products?
Required A
Mini Mouth
(Product C)
$ 52.00
$48.00
Required B >
1.7
1,900
Transcribed Image Text:Hydroflask water bottles produces three products, large mouth, small mouth and mini mouth water bottles. The company is currently facing a labor shortage; only 4,800 hours are available this month. The selling prices, costs, labor requirements, and demand for the three products are as follows: Sales price Variable cost per unit Direct labor hours per unit Demand (units) Large Mouth (Product A) $ 70.00 $ 53.00 2.1 1,200 Small Mouth (Product B) $ 38.00 $ 19.00 Required A Required B Required C Complete this question by entering your answers in the tabs below. 3.3 1,700 Required: a. In what order should Hydroflask prioritize production of the products? b. How many of each product should be produced during the labor shortage to maximize profit? c. What is the total contribution margin if Hydroflask prioritizes production according to its limited resources? In what order should Hanson prioritize production of the products? Required A Mini Mouth (Product C) $ 52.00 $48.00 Required B > 1.7 1,900
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