Rollins Company manufactures two products—S500 and T750. The company provided the following information with respect to these products: S500 T750 Estimated customer demand (in units) 5,600 4,000 Selling price per unit $ 2,400 $ 4,200 Variable expense per unit $ 1,400 $ 2,400 The company has four manufacturing departments—Fabrication, Molding, Machining, and Assemble & Pack. The capacity available in each department (in hours) and the demands that one unit of each of the company’s products makes on those departments is as follows: S500 (hours per unit) T750 (hours per unit) Capacity (in hours) Fabrication 1 2 4,000 Molding 2 2 6,000 Machining 2 0 5,000 Assemble & Pack 0 3 4,500 The company is trying to decide what product mix will maximize profits. Given that its fixed costs will not change regardless of the chosen mix, the company plans to identify the product mix that maximizes its total contribution margin. Download the Excel file, which you will use to create the Tableau visualization that aid your explanation. Upload the Excel file into Tableau by doing the following: Open the Tableau Desktop application. On the left-hand side, under the “Connect” header and the “To a file” sub-header, click on “Microsoft Excel.” Choose the Excel file and click “Open.” Since the only worksheet in the Excel File is “Calloway Company” it will default as a selection with no further import steps needed Required: Assume the company focuses solely on producing S500: Which department would be the constraint? (Hint: Focus on each department’s capacity (in hours) divided by S500’s “hours per unit” within each department.) MACHINING What is S500’s contribution margin per hour of the constraining resource that you identified in requirement 1a? (Hint: Calculate S500’s contribution margin per unit and divide it by the “hours per unit” for the department you identified in requirement 1a.) $500 Assume the company focuses solely on producing T750: Which department would be its constraint? (Hint: Focus on each department’s capacity (in hours) divided by T750’s “hours per unit” within each department.) ASSEMBLE & PACK What is T750’s contribution margin per hour of the constraining resource that you identified in requirement 2a? (Hint: Calculate T750’s contribution margin per unit and divide it by the “hours per unit” for the department you identified in requirement 2a.) $600 3. Based on the answers to requirements 1 and 2: Which product has the highest contribution margin per hour of its constraining resource? If the company decided to initiate production by maximizing the output of the product chosen in requirement 3a, then how many units of this product would it be able to make before encountering that product’s constraint? If the company implemented the production plan in requirement 3b, then how many units of its remaining product could it make with the departmental capacities that are still available? What total contribution margin would the company earn if it followed the production plan described in requirements 3b and 3c? I just need 3. 1-4 answered.

Rollins Company manufactures two products—S500 and T750. The company provided the following information with respect to these products: S500 T750 Estimated customer demand (in units) 5,600 4,000 Selling price per unit $ 2,400 $ 4,200 Variable expense per unit $ 1,400 $ 2,400 The company has four manufacturing departments—Fabrication, Molding, Machining, and Assemble & Pack. The capacity available in each department (in hours) and the demands that one unit of each of the company’s products makes on those departments is as follows: S500 (hours per unit) T750 (hours per unit) Capacity (in hours) Fabrication 1 2 4,000 Molding 2 2 6,000 Machining 2 0 5,000 Assemble & Pack 0 3 4,500 The company is trying to decide what product mix will maximize profits. Given that its fixed costs will not change regardless of the chosen mix, the company plans to identify the product mix that maximizes its total contribution margin. Download the Excel file, which you will use to create the Tableau visualization that aid your explanation. Upload the Excel file into Tableau by doing the following: Open the Tableau Desktop application. On the left-hand side, under the “Connect” header and the “To a file” sub-header, click on “Microsoft Excel.” Choose the Excel file and click “Open.” Since the only worksheet in the Excel File is “Calloway Company” it will default as a selection with no further import steps needed Required: Assume the company focuses solely on producing S500: Which department would be the constraint? (Hint: Focus on each department’s capacity (in hours) divided by S500’s “hours per unit” within each department.) MACHINING What is S500’s contribution margin per hour of the constraining resource that you identified in requirement 1a? (Hint: Calculate S500’s contribution margin per unit and divide it by the “hours per unit” for the department you identified in requirement 1a.) $500 Assume the company focuses solely on producing T750: Which department would be its constraint? (Hint: Focus on each department’s capacity (in hours) divided by T750’s “hours per unit” within each department.) ASSEMBLE & PACK What is T750’s contribution margin per hour of the constraining resource that you identified in requirement 2a? (Hint: Calculate T750’s contribution margin per unit and divide it by the “hours per unit” for the department you identified in requirement 2a.) $600 3. Based on the answers to requirements 1 and 2: Which product has the highest contribution margin per hour of its constraining resource? If the company decided to initiate production by maximizing the output of the product chosen in requirement 3a, then how many units of this product would it be able to make before encountering that product’s constraint? If the company implemented the production plan in requirement 3b, then how many units of its remaining product could it make with the departmental capacities that are still available? What total contribution margin would the company earn if it followed the production plan described in requirements 3b and 3c? I just need 3. 1-4 answered.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

	S500	T750
Estimated customer demand (in units)	5,600	4,000
Selling price per unit	$ 2,400	$ 4,200
Variable expense per unit	$ 1,400	$ 2,400

	S500 (hours per unit)	T750 (hours per unit)	Capacity (in hours)
Fabrication	1	2	4,000
Molding	2	2	6,000
Machining	2	0	5,000
Assemble & Pack	0	3	4,500

Required:

Assume the company focuses solely on producing S500:
1. Which department would be the constraint? (Hint: Focus on each department’s capacity (in hours) divided by S500’s “hours per unit” within each department.) MACHINING
2. What is S500’s contribution margin per hour of the constraining resource that you identified in requirement 1a? (Hint: Calculate S500’s contribution margin per unit and divide it by the “hours per unit” for the department you identified in requirement 1a.) $500
Assume the company focuses solely on producing T750:
1. Which department would be its constraint? (Hint: Focus on each department’s capacity (in hours) divided by T750’s “hours per unit” within each department.) ASSEMBLE & PACK
2. What is T750’s contribution margin per hour of the constraining resource that you identified in requirement 2a? (Hint: Calculate T750’s contribution margin per unit and divide it by the “hours per unit” for the department you identified in requirement 2a.) $600

3. Based on the answers to requirements 1 and 2:

1. Which product has the highest contribution margin per hour of its constraining resource?
2. If the company decided to initiate production by maximizing the output of the product chosen in requirement 3a, then how many units of this product would it be able to make before encountering that product’s constraint?
3. If the company implemented the production plan in requirement 3b, then how many units of its remaining product could it make with the departmental capacities that are still available?
4. What total contribution margin would the company earn if it followed the production plan described in requirements 3b and 3c?

I just need 3. 1-4 answered.

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