Theory of constraints, contribution margin, sensitivity analysis. Damon Furniture (DF) produces berglass doors in two processes: molding and nishing. DF is currently producing two models: Masoline and Aldernite. Production in the molding department is limited by the amount of materials available. Production in the nishing department is limited by the amount of trained labor available. The only variable costs are materials in the molding department and labor in the nishing department. Following are the requirements and limitations by model and department: MasolineAlderniteMaterials/Labor AvailableMolding Materials30 pounds per door45 pounds per door540,000 pounds$3 per poundFinishing Time3 hours per door4 hours per door102,000 hours$15 per hourSelling Price$235 per door$305 per doorCost of materials and laborThe following requirements refer only to the preceding data. There is no connection between the requirements.1. If there were enough demand for either door, which door would DF produce? How many of these doorswould it make and sell?2. If DF sells three Masoline for each Aldernite, how many doors of each type would it produce and sell?What would be the total contribution margin?3. If DF sells three Masoline for each Aldernite, how much would production and contribution marginincrease if the molding department could buy 9,000 more pounds of materials for $3 per pound?4. If DF sells three Masoline for each Aldernite, how much would production and contribution marginincrease if the assembly department could get 780 more labor hours at $15 per hour?Required

Answered: Masoline Aldernite Materials/Labor…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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Theory of constraints, contribution margin, sensitivity analysis. Damon Furniture (DF) produces berglass doors in two processes: molding and nishing. DF is currently producing two models: Masoline and Aldernite. Production in the molding department is limited by the amount of materials available. Production in the nishing department is limited by the amount of trained labor available. The only variable costs are materials in the molding department and labor in the nishing department. Following are the requirements and limitations by model and department:

Masoline
Aldernite
Materials/Labor Available
Molding Materials
30 pounds per door
45 pounds per door
540,000 pounds
$3 per pound
Finishing Time
3 hours per door
4 hours per door
102,000 hours
$15 per hour
Selling Price
$235 per door
$305 per door
Cost of materials and labor
The following requirements refer only to the preceding data. There is no connection between the requirements.
1. If there were enough demand for either door, which door would DF produce? How many of these doors
would it make and sell?
2. If DF sells three Masoline for each Aldernite, how many doors of each type would it produce and sell?
What would be the total contribution margin?
3. If DF sells three Masoline for each Aldernite, how much would production and contribution margin
increase if the molding department could buy 9,000 more pounds of materials for $3 per pound?
4. If DF sells three Masoline for each Aldernite, how much would production and contribution margin
increase if the assembly department could get 780 more labor hours at $15 per hour?
Required

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Hey, since there are multiple requirements posted, we will answer first three requirements. If you want any specific requirement to be answered then please submit the question by specifying the requirement that need to be solved in your message.

Step 2

Compute contribution margins for the doors as shown below:

Compute number of doors that can make and sell as shown below:

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