Principles of Accounting Volume 2
19th Edition
ISBN: 9781947172609
Author: OpenStax
Publisher: OpenStax College
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Textbook Question
Chapter 10, Problem 11EB
Power Corp. makes 2 products: blades for table saws and blades for handsaws. Each product passes through the sharpening machine area, which is the chief constraint during production. Handsaw blades take 15 minutes on the sharpening machine and have a contribution margin per blade of $15. Table saw blades take 20 minutes on the sharpening machine and have a contribution margin per blade of $35. If it is assumed that Power Corp. has 5,000 hours available on the sharpening machine to service a minimum demand for each product of 4,000 units, how much will profits increase if 200 more hours of machine time can be obtained?
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Power Corp. makes 2 products: blades for table saws and blades for handsaws. Each product passes through the sharpening machine
area, which is the chief constraint during production. Handsaw blades take 15 minutes on the sharpening machine and have a
contribution margin per blade of $15. Table saw blades take 20 minutes on the sharpening machine and have a contribution margin
per blade of $35.
PLEASE NOTE: All dollar amounts are rounded to whole dollars and shown with "$" and commas as needed (i.e. $12,345). For units
of blades for table saws and hand saws, use commas as needed (i.e. 1,234).
Part A: If it is assumed that Power Corp. has 5,000 hours available on the sharpening machine to service a minimum demand for each
product of 4,000 units, how much will profit increase if 200 more hours of machine time can be obtained? [HINT - You should
convert the hours to minutes.]
1. What is the contribution margin per the constrained resource for table saw blades?
2. What is the contribution…
Rough Stuff makes 2 products: khaki shorts and khaki pants for men. Each product passes
through the cutting machine area, which is the chief constraint during production. Khaki shorts
take 15 minutes on the cutting machine and have a contribution margin per pair of shorts of
$15. Khaki pants take 24 minutes on the cutting machine and have a contribution margin per
pair of pants of $30. If it is assumed that Rough Stuff has 4,740 hours available on the cutting
machine to service a minimum demand for each product of 3,000 units, how many of each
product should be made?
Khaki shorts
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Khaki pants
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Rough Stuff makes 2 products: khaki shorts and khaki pants for men. Each product passes through the cutting machine area, which is the chief constraint during
production. Khaki shorts take 15 minutes on the cutting machine and have a contribution margin per pair of shorts of $17. Khaki pants take 24 minutes on the cutting
machine and have a contribution margin per pair of pants of $34. If it is assumed that Rough Stuff has 4,800 hours available on the cutting machine to service a
minimum demand for each product of 3,000 units, how much will profits increase if 88 more hours of machine time can be obtained?
1,950 X
Chapter 10 Solutions
Principles of Accounting Volume 2
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