Stanley Inc has 5,400 machine hours available each month. The following information on the company's three products is available: Product 1 Product 2 Product 3 Contribution margin per unit $ 15.00 $ 18.00 $ 7.50 Machine hours per unit 3 1 If market demand exceeds the available capacity, in what sequence should orders be filled to maximize the company's profits? a. Product 3 first, product 2 second, and product 1 third. b. Product 2 first, product 3 second, and product 1 third. c. Product 3 first, product 1 second, and product 2 third. d. Product 1 first, product 2 second, and product 3 third.

Stanley Inc has 5,400 machine hours available each month. The following information on the company's three products is available: Product 1 Product 2 Product 3 Contribution margin per unit $ 15.00 $ 18.00 $ 7.50 Machine hours per unit 3 1 If market demand exceeds the available capacity, in what sequence should orders be filled to maximize the company's profits? a. Product 3 first, product 2 second, and product 1 third. b. Product 2 first, product 3 second, and product 1 third. c. Product 3 first, product 1 second, and product 2 third. d. Product 1 first, product 2 second, and product 3 third.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

The Varone Company makes a single product called a Hom. The company has the capacity to produce 40,000 Homs per year. Per unit costs to produce and sell one Hom at that activity level are: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling expense Fixed selling expense S $20 $10 $5 $7 O $23,200 decrease $27,000 Increase $50,800 Increase O $63,000 Increase $10 $8 The regular selling price for one Hom is $60. A special order has been received at Varone from the Fairview Company to purchase 6,300 Homs next year at 20% off the regular selling price. If this special order were accepted, the variable selling expense would be reduced by 30%. However, Varone would have to purchase a specialized machine to engrave the Fairview name on each Hom in the special order. This machine would cost $10,800 and it would have no use after the special order was filled. The total fixed costs, both manufacturing and selling, are constant within the…
Explorer Company has an annual plant capacity of 3,000 units. Data concerning this product are given below: Direct Materials cost per unit $ 20.00 Direct Labor cost per unit $ 8.00 Variable manufacturing overhead cost per unit $ 5.00 Variable sales commissions per unit $ 6.00 Fixed selling and administration expenses per unit $ 9.00 $ 48.00 Currently, the sales volume at the regular selling price of $75 is 2,500 units per year. The company has received a special order for 500 units at a selling price of $45 each. Regular sales would not be affected, and sales commissions on the 500 units would only be 2/3 of the regular sales commission per unit for this special order. This special order would have no impact on total fixed costs. Required: a. Determine whether the company should accept the special order. Explain in your own words your decision and show all computations.
Haresh
Andretti Company has a single product called a Dak. The company normally produces and sells 84,000 Daks each year at a selling Each question is independent.price of $62 per unit A number of questions relating to the production and sale of Daks follow. The company's unit costs at this level of activity are given below:Direct materials $ 7.50 Direct labor 11.00 Variable manufacturing overhead 1.90 Fixed manufacturing overhead 5.00 ($420,000 total) Variable selling expenses 3.70 Fixed selling expenses 4.50 ($378,000 total) Total cost per unit $ 33.60 Required: 1-a. Assume that Andretti Company has sufficient capacity to produce 100,800 Daks each year without any increase in fixed manufacturing overhead costs. The company could increase its unit sales by 20% above the present 84,000 units each year if it were willing to increase the fixed selling expenses by $120,000. What is the financial advantage (disadvantage) of investing an additional $120,000 in fixed selling expenses? b. Would the…
Denger
Pursuit Company produces two products: Bric and Brac. The following table summarizes the products' details and planned unit sales for the upcoming period: Bric : Sellingpriceperunit.............$25. Variablecostperunit $14. Planned unit sales volume . . . . . . 800,000 Brac: Sellingpriceperunit............. $30 Variablecostperunit $17. Planned unit sales volume. 400,000 Pursuit Company has total fixed costs of $ 10 million and faces a tax rate of 30% . (a)What is Pursuit Company's expected profit at the planned level of sales? (b)Assuming a constant sales mix, what are the unit sales of Bric and Brac required for Pursuit Company to break even? (c) Assuming a constant sales mix, what are the unit sales of Bric and Brac required for Pursuit Company to earn an after - tax income of $ 910,000?
Delta Company produces a single product. The cost of producing and selling a single unit of this product at the company's normal activity level of 96,000 units per year is: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling and administrative expenses Fixed selling and administrative expenses $ 2.00 $ 3.00 $ 0.50 $ 3.45 $ 1.50 $ 2.00 The normal selling price is $24.00 per unit. The company's capacity is 126,000 units per year. An order has been received from a mail- order house for 2,500 units at a special price of $21.00 per unit. This order would not affect regular sales or total fixed costs. Required: 1. What is the financial advantage (disadvantage) of accepting the special order? 2. As a separate matter from the special order, assume the company's inventory includes 1,000 units that are inferior quality. The units must be sold through regular channels at a reduced price. The company does not expect the selling of these…
Polaski Company manufactures and sells a single product called a Ret. Operating at capacity, the company can produce and sell 50,000 Rets per year. Costs associated with this level of production and sales are given below: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling expense Fixed selling expense Total cost Unit $ 20 Total $1,000,000 8 400,000 3 150,000 9 450,000 4 200,000 6 300,000 $50 $2,500,000 The Rets normally sell for $55 each. Fixed manufacturing overhead is $450,000 per year within the range of 41,000 through 50,000 Rets per year. Required: 1. Assume that due to a recession, Polaski Company expects to sell only 41,000 Rets through regular channels next year. A large retail chain has offered to purchase 9,000 Rets if Polaski is willing to accept a 16% discount off the regular price. There would be no sales commissions on this order; thus, variable selling expenses would be slashed by 75%. However, Polaski Company…