Determining the Optimal Product Mix with One Constrained Resource Comfy Fit Company manufactures two types of university sweatshirts, the Swoop and the Rufus, with unit contribution margins of $11 and $22, respectively. Regardless of type, each sweatshirt must be fed through a stitching machine to affix the appropriate university logo. The firm leases seven machines that each provides 1,200 hours of machine time per year. Each Swoop sweatshirt requires 12 minutes of machine time, and each Rufus sweatshirt requires 27 minutes of machine time. Assume that there are no other constraints. This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions below. Open spreadsheet Required: 1. What is the contribution margin per hour of machine time for each type of sweatshirt? Do not round intermediate calculations. Round your answers to the nearest cent. Contribution Margin Swoop $fill in the blank 2 Rufus $fill in the blank 3 2. What is the optimal mix of sweatshirts? Do not round intermediate calculations. Round your answers to the nearest whole number. If an amount is zero, enter "0". Optimal Mix Swoop fill in the blank 4 units Rufus fill in the blank 5 units 3. What is the total contribution margin earned for the optimal mix? Do not round intermediate calculations. Round your answer to the nearest dollar. $fill in the blank 6

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Question

Determining the Optimal Product Mix with One Constrained Resource

Comfy Fit Company manufactures two types of university sweatshirts, the Swoop and the Rufus, with unit contribution margins of $11 and $22, respectively. Regardless of type, each sweatshirt must be fed through a stitching machine to affix the appropriate university logo. The firm leases seven machines that each provides 1,200 hours of machine time per year. Each Swoop sweatshirt requires 12 minutes of machine time, and each Rufus sweatshirt requires 27 minutes of machine time.

Assume that there are no other constraints.

This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the questions below.

Open spreadsheet

Required:

1.	What is the contribution margin per hour of machine time for each type of sweatshirt? Do not round intermediate calculations. Round your answers to the nearest cent.
		Contribution Margin
	Swoop	$fill in the blank 2
	Rufus	$fill in the blank 3
2.	What is the optimal mix of sweatshirts? Do not round intermediate calculations. Round your answers to the nearest whole number. If an amount is zero, enter "0".
		Optimal Mix
	Swoop	fill in the blank 4 units
	Rufus	fill in the blank 5 units
3.	What is the total contribution margin earned for the optimal mix? Do not round intermediate calculations. Round your answer to the nearest dollar.
	$fill in the blank 6

**Predetermined Departmental Overhead Rates: Applying Overhead to Production**

Hallett uses departmental overhead rates. In the cutting department, overhead is applied on the basis of machine hours. In the sewing department, overhead is applied on the basis of direct labor hours.

---

**DATA**

| | Cutting Department | Sewing Department | Total |
|----------------------------|--------------------|-------------------|----------|
| **Estimated** | | | |
| Overhead | $245,800 | $353,000 | $598,800 |
| Direct labor hours | 31,200 | 101,100 | 132,300 |
| Machine hours | 155,800 | 155,800 | |

| | Cutting Department | Sewing Department | Total |
|----------------------------|--------------------|-------------------|----------|
| **Actual data for June** | | | |
| Overhead | $20,540 | $35,850 | $56,390 |
| Direct labor hours | 2,800 | 8,740 | 11,540 |
| Machine hours | 13,660 | 13,660 | |

---

**Instructions**

Using formulas and cell references, perform the required analysis, and input your answers into the green cells in B and D columns. Select the corresponding choice in the dropdowns in cells C20 and E20. Transfer the numeric results for the green entry cells (B18:B20, D18:D20) and the selected choices (C20 and E20) into the appropriate fields in CNOWv2 for grading.

**Required:**

1. **Predetermined overhead rates**
2. **Overhead applied to production for the month of June**
3. **Overhead variance**

---

Enter calculations and analysis into the designated fields for both the cutting and sewing departments as guided by the requirements.

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 3 steps with 2 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions