Operations Management: Processes and Supply Chains, Student Value Edition Plus MyLab Operations Management with Pearson eText -- Access Card Package (12th Edition)
Operations Management: Processes and Supply Chains, Student Value Edition Plus MyLab Operations Management with Pearson eText -- Access Card Package (12th Edition)
12th Edition
ISBN: 9780134855424
Author: Lee J. Krajewski, Manoj K. Malhotra, Larry P. Ritzman
Publisher: PEARSON
Question
Book Icon
Chapter 5, Problem 9P
Summary Introduction

Interpretation: The product mix for improving the profitability and change in profit needs to be determined.

Concept Introduction: Contribution margin is concerned with preparing income statement. Generally for calculating profit or loss in business it is required.

Blurred answer
Students have asked these similar questions
LMNO Gaskets has formulated a production plan for a product to meet demand over the upcoming four quarters. Demand in each of the four quarters and production, overtime, and subcontracting capacities are reported in the table below, in addition to the feasible production plan. The relevant costs are: • Regular time production cost is $10/unit. Overtime production cost is $14/unit. Subcontracting cost is $18/unit Inventory is held at a cost of $1/unit/quarter. • Units may be backordered at a cost of $4/unit/quarter. Production Resource Regular Time Q1 Overtime Q1 Subcontract Q1 Regular Time Q2 Overtime Q2 Subcontract Q2 Regular Time Q3 Overtime Q3 Subcontract Q3 Demand in Quarter Demand in Quarter Q2 0 20 0 550 Q1 550 230 0 0 0 0 40 40 0 860 250 470 0 40 0 1330 What is the inventory cost for the year? What is the backorder cost for the year? What is the total cost for the year? Q3 0 0 0 0 0 30 510 160 0 700 What is the total overtime production cost for the year? Capacity 550 250 500…
Smart Manufacturing Company (SMC) manufactures a variety of products other than the drum components for printers. Their high selling mobile juicer cup JG-142 has the following expected demand sales figures (in units) over the coming six months: Month 2 3 4 5 Expected Demand (units) 17680 23040 21120 16640 21760 The following planning parameters apply: Current number of workers Output rate per worker Number of regular time hours Number of working days Regular time labour cost Overtime labour cost Planning Parameters 26 4 units/hour 8 hours/day 20 days/month Maximum overtime hours allowed Hiring cost (including training) Layoff cost Inventory carrying cost Backorder cost Opening inventory Planned ending inventory (end of month 6) Material Cost Subcontracting Cost with material Maximum subcontracting allowed $14.00 /hour $21.00 /hour 6 18300 20% of regular worker-hours/month $950 /worker $1780 /worker $1.75 /unit/month Total 118540 $7.00/unit backordered 400 units 900 units $15 /unit $35…
Fedori Corporation has a Parts Division that does work for other Divisions in the company as well as for outside customers. The company's Machinery Division has asked the Parts Division to provide it with 4,000 special parts each year. The special parts would require P23.00 per unit in variable production costs. The Machinery Division has a bid from an outside supplier for the special parts at P37.00 per unit. In order to have time and space to produce the special part, the Parts Division would have to cut back production of another part-the YR24 that it presently is producing. The YR24 sells for P40.00 per unit, and requires P28.00 per unit in variable production costs. Packaging and shipping costs of the YR24 are P3.00 per unit. Packaging and shipping costs for the new special part would be only P1.50 per unit. The Parts Division is now producing and selling 15,000 units of the YR24 each year. Production and sales of the YR24 would drop by 20% if the new special part is produced for…
Knowledge Booster
Background pattern image
Similar questions
SEE MORE QUESTIONS
Recommended textbooks for you
Text book image
Practical Management Science
Operations Management
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:Cengage,