Work centers W, X, Y, and Z are available for 40 hours per week and have no setup time when switching between products, Market demand for each product is 80 units per week. In the questions that follow, the traditional method refers to maximizing the contribution margin per unit for each product, and the bottleneck method refers to maximizing the contribution margin per minute at the bottleneck for each product A company makes four products that have the following characteristics: Product A sells for $50 but needs $10 of materials and $15 of labor to produce; Product B sells for $75 but needs $30 of materials and $15 of labor to produce, Product C sells for $100 but needs $50 of materials and $30 of labor to produce, Product D sells for $150 but needs $75 of materials and $40 of labor to produce. The processing requirements for each product on each of the four machines are shown in the table. Work Center W X Y Z A 6 9 4 10 Processing Time (min/unit) B C 1 3 4 12 7 10 3 0 D 12 8 A. Greater than $8,100 but less than or equal to $8,300 OB. Greater than $8,300 but less than or equal to $8,500 OC. Less than or equal to $8,100 OD. Greater than $8,500 9 11 Using the traditional method, what is the profit if the company manufactures the optimal product mix (consider variable costs only-overhead is not included in this profit calculation)?
Work centers W, X, Y, and Z are available for 40 hours per week and have no setup time when switching between products, Market demand for each product is 80 units per week. In the questions that follow, the traditional method refers to maximizing the contribution margin per unit for each product, and the bottleneck method refers to maximizing the contribution margin per minute at the bottleneck for each product A company makes four products that have the following characteristics: Product A sells for $50 but needs $10 of materials and $15 of labor to produce; Product B sells for $75 but needs $30 of materials and $15 of labor to produce, Product C sells for $100 but needs $50 of materials and $30 of labor to produce, Product D sells for $150 but needs $75 of materials and $40 of labor to produce. The processing requirements for each product on each of the four machines are shown in the table. Work Center W X Y Z A 6 9 4 10 Processing Time (min/unit) B C 1 3 4 12 7 10 3 0 D 12 8 A. Greater than $8,100 but less than or equal to $8,300 OB. Greater than $8,300 but less than or equal to $8,500 OC. Less than or equal to $8,100 OD. Greater than $8,500 9 11 Using the traditional method, what is the profit if the company manufactures the optimal product mix (consider variable costs only-overhead is not included in this profit calculation)?
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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Transcribed Image Text:Work centers W, X, Y, and Z are available for 40 hours per week and have no setup time when switching
between products. Market demand for each product is 80 units per week. In the questions that follow, the
traditional method refers to maximizing the contribution margin per unit for each product, and the bottleneck
method refers to maximizing the contribution margin per minute at the bottleneck for each product.
A company makes four products that have the following characteristics: Product A sells for $50 but needs $10 of
materials and $15 of labor to produce; Product B sells for $75 but needs $30 of materials and $15 of labor to
produce; Product C sells for $100 but needs $50 of materials and $30 of labor to produce, Product D sells for
$150 but needs $75 of materials and $40 of labor to produce. The processing requirements for each product on
each of the four machines are shown in the table
Work Center
W
X
Y
Z
A
6
9
4
10
Processing Time (min/unit)
B
C
1
3
10
3
0
12
A. Greater than $8,100 but less than or equal to $8,300
O B. Greater than $8,300 but less than or equal to $8,500
OC. Less than or equal to $8,100
O D. Greater than $8,500
D
12
8
9
11
Using the traditional method, what is the profit if the company manufactures the optimal product mix (consider
variable costs only-overhead is not included in this profit calculation)?
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