Product Decisions Under Bottlenecked Operations Youngstown Glass Company manufactures three types of safety plate glass: large, medium, and small. All three products have high demand. Thus, Youngstown Glass is able to sell all the safety glass that it can make. The production process includes an autoclave operation, which is a pressurized heat treatment. The autoclave is a production bottleneck. Total fixed costs are $91,000 for the company as a whole. In addition, the following information is available about the three products: Unit selling price Unit variable cost Unit contribution margin Autoclave hours per unit Total process hours per unit Budgeted units of production Large Medium Small $240 $94 $199 (189) (77) (175) $ 51 $ 17 $ 24 6 2 4 18 4 8 2,200 2,200 2,200 a. Determine the contribution margin by glass type and the total company operating income for the budgeted units of production. Large Medium Small Units produced Revenues Variable costs Contribution margin Fixed costs Operating income tA A A A b. Prepare an analysis showing which product is the most profitable per bottleneck hour. Round the "Unit contribution margin per production bottleneck hour" amounts to the nearest cent. Contribution margin Autoclave hours per unit Unit contribution margin per production bottleneck hour Check My Work SA tA Large Medium Next
Product Decisions Under Bottlenecked Operations Youngstown Glass Company manufactures three types of safety plate glass: large, medium, and small. All three products have high demand. Thus, Youngstown Glass is able to sell all the safety glass that it can make. The production process includes an autoclave operation, which is a pressurized heat treatment. The autoclave is a production bottleneck. Total fixed costs are $91,000 for the company as a whole. In addition, the following information is available about the three products: Unit selling price Unit variable cost Unit contribution margin Autoclave hours per unit Total process hours per unit Budgeted units of production Large Medium Small $240 $94 $199 (189) (77) (175) $ 51 $ 17 $ 24 6 2 4 18 4 8 2,200 2,200 2,200 a. Determine the contribution margin by glass type and the total company operating income for the budgeted units of production. Large Medium Small Units produced Revenues Variable costs Contribution margin Fixed costs Operating income tA A A A b. Prepare an analysis showing which product is the most profitable per bottleneck hour. Round the "Unit contribution margin per production bottleneck hour" amounts to the nearest cent. Contribution margin Autoclave hours per unit Unit contribution margin per production bottleneck hour Check My Work SA tA Large Medium Next
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Product Decisions Under Bottlenecked Operations
Youngstown Glass Company manufactures three types of safety plate glass: large, medium, and small. All three
products have high demand. Thus, Youngstown Glass is able to sell all the safety glass that it can make. The
production process includes an autoclave operation, which is a pressurized heat treatment. The autoclave is a
production bottleneck. Total fixed costs are $91,000 for the company as a whole. In addition, the following
information is available about the three products:
Unit selling price
Unit variable cost
Unit contribution margin
Autoclave hours per unit
Total process hours per unit
Budgeted units of production
Large
Medium
Small
$240
$94
$199
(189)
(77)
(175)
$ 51
$ 17
$ 24
6
2
4
18
4
8
2,200
2,200
2,200
a. Determine the contribution margin by glass type and the total company operating income for the budgeted
units of production.
Large
Medium
Small
Units produced
Revenues
Variable costs
Contribution margin
Fixed costs
Operating income
tA
A
A
A
b. Prepare an analysis showing which product is the most profitable per bottleneck hour. Round the "Unit
contribution margin per production bottleneck hour" amounts to the nearest cent.
Contribution margin
Autoclave hours per unit
Unit contribution margin per production bottleneck hour
Check My Work
SA
tA
Large
Medium
Next
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