Theory of constraints: Shera company is manufacturing furniture, cabinets and tables in particular. Currently, the company can sell as many units as it can produce. However, it is constrained by its availability of machine-hour capacity. On a per unit basis, sales price for cabinets and tables are $80 and $160, respectively. With variable costs of $60 and $155. Moreover, it requires 1 1/2 machine hours to manufacture cabinets while 2 1/2 machine hours are needed for tables. What is the contribution per unit of tables and cabinets considering the limited machine hours
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
Theory of constraints:
Shera company is manufacturing furniture, cabinets and tables in particular. Currently, the company can sell as many units as it can produce. However, it is constrained by its availability of machine-hour capacity. On a per unit basis, sales price for cabinets and tables are $80 and $160, respectively. With variable costs of $60 and $155. Moreover, it requires 1 1/2 machine hours to manufacture cabinets while 2 1/2 machine hours are needed for tables.
What is the contribution per unit of tables and cabinets considering the limited machine hours
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