Talbot Industries manufactures two models of wireless headset: TI-12 and TI-28. Each product requires time on a single machine. The machine has a monthly capacity of 540 hours. Total market demand for the two products is limited to 2,000 units of TI-12 and 1,000 units of TI-28 monthly. Talbot is currently producing and selling 1,500 TI-12 models and 780 TI-28 models each month. Cost and machine-usage data for the two products are shown in the following spreadsheet, which analysts at Talbot use for production planning purposes: Price Less variable costs per unit Material Labor Overhead Contribution margin per unit Fixed costs Manufacturing Marketing and administrative Machine hours per unit Machine hours used Machine hours available Quantity produced Maximum demand Profit TI-12 $ 80 Required A Required B 23 29 8 $ 20 0.1 < Required A 1,500 2,000 TI-28 $ 290 90 64 20 $ 116 0.5 780 1,000 Complete this question by entering your answers in the tabs below. Total $ 34,000 $ 31,000 $ 65,000 Required: a. What is the optimal production schedule for Talbot Industries? In other words, how many TI-12s and TI-28s should the company produce each month to maximize monthly profit? b. If Talbot Industries produces at the level found in requirement (a), how much will monthly profit increase over the current production schedule? 540 540 $ 55,480 If Talbot Industries produces at the level found in requirement (a), how much will monthly profit increase over the current production schedule? Increase in monthly profit Required B >
Talbot Industries manufactures two models of wireless headset: TI-12 and TI-28. Each product requires time on a single machine. The machine has a monthly capacity of 540 hours. Total market demand for the two products is limited to 2,000 units of TI-12 and 1,000 units of TI-28 monthly. Talbot is currently producing and selling 1,500 TI-12 models and 780 TI-28 models each month. Cost and machine-usage data for the two products are shown in the following spreadsheet, which analysts at Talbot use for production planning purposes: Price Less variable costs per unit Material Labor Overhead Contribution margin per unit Fixed costs Manufacturing Marketing and administrative Machine hours per unit Machine hours used Machine hours available Quantity produced Maximum demand Profit TI-12 $ 80 Required A Required B 23 29 8 $ 20 0.1 < Required A 1,500 2,000 TI-28 $ 290 90 64 20 $ 116 0.5 780 1,000 Complete this question by entering your answers in the tabs below. Total $ 34,000 $ 31,000 $ 65,000 Required: a. What is the optimal production schedule for Talbot Industries? In other words, how many TI-12s and TI-28s should the company produce each month to maximize monthly profit? b. If Talbot Industries produces at the level found in requirement (a), how much will monthly profit increase over the current production schedule? 540 540 $ 55,480 If Talbot Industries produces at the level found in requirement (a), how much will monthly profit increase over the current production schedule? Increase in monthly profit Required B >
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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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.
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Transcribed Image Text:Talbot Industries manufactures two models of wireless headset: TI-12 and TI-28. Each product requires time on a single machine. The
machine has a monthly capacity of 540 hours. Total market demand for the two products is limited to 2,000 units of TI-12 and 1,000
units of TI-28 monthly. Talbot is currently producing and selling 1,500 TI-12 models and 780 TI-28 models each month. Cost and
machine-usage data for the two products are shown in the following spreadsheet, which analysts at Talbot use for production planning
purposes:
Price
Less variable costs per unit
Material
Labor
Overhead
Contribution margin per unit
Fixed costs
Manufacturing
Marketing and administrative
Machine hours per unit
Machine hours used
Machine hours available
Quantity produced
Maximum demand
Profit
TI-12
$ 80
Required A Required B
23
29
8
$ 20
0.1
< Required A
1,500
2,000
TI-28
$ 290
90
64
20
$ 116
0.5
780
1,000
Complete this question by entering your answers in the tabs below.
Total
$ 34,000
$ 31,000
$ 65,000
Required:
a. What is the optimal production schedule for Talbot Industries? In other words, how many TI-12s and TI-28s should the company
produce each month to maximize monthly profit?
b. If Talbot Industries produces at the level found in requirement (a), how much will monthly profit increase over the current production
schedule?
540
540
$ 55,480
If Talbot Industries produces at the level found in requirement (a), how much will monthly profit increase over the current
production schedule?
Increase in monthly profit
Required B >
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