Leach Finishing makes various metal fittings for the construction industry. Three of the fittings, models X-12, X-24, and X-30, requiregrinding on a patented machine of which Leach has only one. The cost of production information for the three products follow:X-12Price per fittingVariable cost per fittingUnits per hour of grindingThe testing machine used for both models has a capacity of 2,870 hours annually. Fixed manufacturing costs are $484,000 annually.Required A Required BX-24$29$ 1418.0X-12X-24X-30unitsunitsunits$ 45X-30$2112.5Required:a. Suppose that Leach Finishing can sell at most 55,600 units of any one fitting. How many units of each fitting model should LeachFinishing produce annually?b. Suppose that Leach Finishing can sell at most 15,300 units of any one fitting. How many units of each fitting should Leach Finishingproduce annually?15Complete this question by entering your answers in the tabs below.$ 64$3810.0Suppose that Leach Finishing can sell at most 55,600 units of any one fitting. How many units of each fitting model shouldLeach Finishing produce annually?Doquired F

Answered: Leach Finishing makes various metal…

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Leach Finishing makes various metal fittings for the construction industry. Three of the fittings, models X-12, X-24, and X-30, require
grinding on a patented machine of which Leach has only one. The cost of production information for the three products follow:
X-12
Price per fitting
Variable cost per fitting
Units per hour of grinding
The testing machine used for both models has a capacity of 2,870 hours annually. Fixed manufacturing costs are $484,000 annually.
Required A Required B
X-24
$29
$ 14
18.0
X-12
X-24
X-30
units
units
units
$ 45
X-30
$21
12.5
Required:
a. Suppose that Leach Finishing can sell at most 55,600 units of any one fitting. How many units of each fitting model should Leach
Finishing produce annually?
b. Suppose that Leach Finishing can sell at most 15,300 units of any one fitting. How many units of each fitting should Leach Finishing
produce annually?
15
Complete this question by entering your answers in the tabs below.
$ 64
$38
10.0
Suppose that Leach Finishing can sell at most 55,600 units of any one fitting. How many units of each fitting model should
Leach Finishing produce annually?
Doquired F

Expert Solution

Step 1

Statement of ranking indicating which product to produced first, second and third:

	Product
	X-12	X-24	X-30
Sales price per unit	$29	$45	$64
Variable cost per unit	$14	$21	$38
Contribution margin per unit	$15	$24	$26
Grinding hours per unit	0.0556	0.0800	0.1000
Contribution margin per hour (i.e. $15x18; $24x12.5; $26x10)	$270	$300	$260
Ranking	Third	Second	First
Produce in order of	Third	Second	First

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