The Wester Corporation produces three products with the following costs and selling prices: Selling price per unit Variable cost per unit A $ 21 $ 11 $5 0.4 0.2 Product B $ 12 $7 $ 3 0.1 0.5 C $32 $18 Fixed cost per unit Direct labor hours per unit Machine hours per unit The company has insufficient capacity to fulfill all of the demand for these three products. $9 0.7 0.2 If machine hours are the constraint, then the ranking of the products from the most profitable to the least profitable use of the constrained resource is:

The Wester Corporation produces three products with the following costs and selling prices: Selling price per unit Variable cost per unit A $ 21 $ 11 $5 0.4 0.2 Product B $ 12 $7 $ 3 0.1 0.5 C $32 $18 Fixed cost per unit Direct labor hours per unit Machine hours per unit The company has insufficient capacity to fulfill all of the demand for these three products. $9 0.7 0.2 If machine hours are the constraint, then the ranking of the products from the most profitable to the least profitable use of the constrained resource is:

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter20: Inventory Management: Economic Order Quantity, Jit, And The Theory Of Constraints

Section: Chapter Questions

Problem 3CE: Patz Company produces two types of machine parts: Part A and Part B, with unit contribution margins...

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The Wester Corporation produces three products with the following costs and selling prices: Product A B C Selling price per unit $ 21 $ 12 $ 32 Variable cost per unit $ 11 $ 7 $ 18 Fixed cost per unit $ 5 $ 3 $ 9 Direct labor hours per unit 0.4 0.1 0.7 Machine hours per unit 0.2 0.5 0.2 The company has insufficient capacity to fulfill all of the demand for these three products. If machine hours are the constraint, then the ranking of the products from the most profitable to the least profitable use of the constrained resource is:
Bertucci Corporation makes three products that use the current constraint which is a particular type of machine. Data concerning those products appear below: TC GL NG Selling price per unit $ 494.40 $ 449.43 $ 469.68 Variable cost per unit $ 395.20 $ 320.21 $ 373.92 Minutes on the constraint 8.00 7.10 7.60 Assume that sufficient constraint time is available to satisfy demand for all but the least profitable product. Up to how much should the company be willing to pay to acquire more of the constrained resource? (Round your intermediate calculations to 2 decimal places.)
Hitec industries produces three products with the following costs and selling prices: Product Y Selling price per unit P40 P30 P35 Variable costs per unit 24 18 20 Contribution margin per unit 18 14 15 Direct labor hours per unit 3 Machine hours per unit 7 4 If Hitec has a limit of 30,000 machine hours but no limit on units sold or direct labor hours, then the three products should be produced in which order? Y. Z, X X, Y, Z X, Z, Y Z, X, Y 2.
The following information applies to the products of Stuart Company. Product A Product B Selling price per unit $ 14 $ 12 Variable cost per unit 11 8 Identify the product that should be produced or sold under each of the following constraints. Consider each constraint separately.Required One unit of Product A requires 1 hour of labor to produce, and one unit of Product B requires 4 hours of labor to produce. Due to labor constraints, demand is higher than the company’s capacity to make both products. The products are sold to the public in retail stores. The company has limited floor space and cannot stock as many products as it would like. Display space is available for only one of the two products. Expected sales of Product A and Product B are 13,000 units and 12,000 units, respectively. The maximum number of machine hours available is 41,000. Product A uses 3 machine hours, and Product B uses 5 machine hours. The company can sell all the…
The constraint at Rauchwerger Corporation is time on a particular machine. The company makes three products that use this machine. Data concerning those products appear below: WX KD FS Selling price per unit $ 335.15 $ 228.43 $ 199.18 Variable cost per unit $ 259.32 $ 173.14 $ 159.67 Minutes on the constraint 7.20 4.00 5.20 Assume that sufficient time is available on the constrained machine to satisfy demand for all but the least profitable product. Up to how much should the company be willing to pay to acquire more of the constrained resource? (Round your intermediate calculations to 2 decimal places.)
The constraint at Rauchwerger Corporation is time on a particular machine. The company makes three products that use this machine. Data concerning those products appear below: Selling price per unit. Variable cost per unit. Minutes on the constraint WX $335.01 $ 259.60 5.80 KD FS $ 228.29 $ 173.42 $ 199.04 $ 159.95 4.10 3.80 Assume that sufficient time is available on the constrained machine to satisfy demand for all but the least profitable product. Up to how much should the company be willing to pay to acquire more of the constrained resource? (Round your intermediate calculations to 2 decimal places.)
Marten Corp. has a limited number of machine hours available to produce its three products A11, B22, and C33. Determine the order that these products should be produced given the following data: A11 B22 C33 $14 $36 $10 Unit sales price 32 6 Unit variable costs 2 4 5 Machine hours per unit o A11, B22. C33 B22, C33, A11 A11, C33. B22 C33. A11, B22 eTextbook and Media
Ewing Company makes two products, M and N. Product information follows. Selling price per unit Variable cost per unit Product M Product N $36 $45 24 30 Required Identify the product that should be produced or sold under each of the following constraints. Consider each constraint separately. a. One unit of Product M requires three hours of labor to produce, and one unit of Product N requires five hours of labor to produce. Due to labor constraints, demand is higher than the company's capacity to make both products.
Garson, Incorporated produces three products. Data concerning the selling prices and unit costs of the three products appear below. Product F G $ 9e $ 70 $ se $ 70 $ 6e $ 5 5 $ 1e0 $ 75 $ 47 5 Selling price Variable costs Fixed costs Milling machine time (minutes) 20 Fixed costs are applied to the products on the basis of direct labor hours. Demand for the three products exceeds the company's productive capacity. The milling machine is the constralnt, with only 2,600 minutes of milling machine time avalable this week. Required: a. Given the milling machine constralnt, which product should be emphasized? b. Assuming that there is still unfilled demand for the product that the company should emphasize in part (a) above, up to how much should the company be willing to pay for an additlonal hour of milling machine time? a. Product that should be emphasized b. Maximum amount per hour
The following information applies to the products of Thornton Company. Product Froduct Selling price per unit Variable cost per unit $17 $17 11 13 Identify the product that should be produced or sold under each of the following constraints. Consider each constraint separately Required a. One unit of Product A requires 2 hours of labor to produce, and one unit of Product B requires 4 hours of labor to produce. Due to labor constraints, demand is higher than the company's capacity to make both products. b. The products are sold to the public in retail stores. The company has limited floor space and cannot stock as many products as it would like. Display space is available for only one of the two products. Expected sales of Product A and Product B are 11,000 units and 10,000 units, respectively. c. The maximum number of machine hours available is 46,000. Product A uses 2 machine hours, and Product B uses 10 machine hours. The company can sell all the products it produces. Complete this…
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Dynondo's Brakes manufactures three different product lines, Model X, Model Y, and Model Z. Considerable market demand exists for all models. The following per unit data apply: Model X Model Y $56 $69 6 6 13 4 15 00 Selling price Direct materials Direct labor ($13 per hour) Variable support costs ($4 per machine-hour) Fixed support costs 13 8 15 Model Z $71 6 26 8 15 Which model has the greatest contribution margin per unit? Model X Model Y Model Z Both Model X and Model Y have the highest and same contribution margin per unit