Steel Company manufactures two kinds of wrought-iron rails: Model E (the elegant) and Model D (the distinctive). Model E rails sell for $59 and cost $50 to make, whereas Model D rails sell for $48 and cost $41 to make. To make one Model E rail requires 2 hours on Machine A, 1 hour on Machine B, and 4 hours on Machine C. On the other hand, to make one Model D rail requires 1 hour on A, 2 hours on B, and 5 hours on C. Production scheduling indicates that during the coming week Machine A will be available for at most 30 hours, Machine B for at most 24 hours, and Machine C for at most 72 hours. Find the number of each kind of rail to be made in the coming week in order for the company to maximize its profit. Calculate the maximum profit.
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
Steel Company manufactures two kinds of wrought-iron rails: Model E (the elegant) and
Model D (the distinctive). Model E rails sell for $59 and cost $50 to make, whereas Model
D rails sell for $48 and cost $41 to make. To make one Model E rail requires 2 hours on
Machine A, 1 hour on Machine B, and 4 hours on Machine C. On the other hand, to make
one Model D rail requires 1 hour on A, 2 hours on B, and 5 hours on C. Production
scheduling indicates that during the coming week Machine A will be available for at most
30 hours, Machine B for at most 24 hours, and Machine C for at most 72 hours. Find the
number of each kind of rail to be made in the coming week in order for the company to
maximize its profit. Calculate the maximum profit.
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