Table 7.5 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. | Processing Time (min/unit) | Work Center | A | B | C | D | W | 6 | 1 | 3 | 12 | X | 9 | 10 | 4 | 8 | Y | 4 | 3 | 12 | 9 | Z | 10 | 0 | 7 | 11 |
Work centers W, X, Y, and Z are available for 40 hours per week and have no setup
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Fixed overhead is estimated at $5,000 per week. The manufacture of each printer requires four machines, Machines #1, 2, 3 and 4. Each of the machines is available for 40 hours a week and there is no setup time required when shifting from the production of one product to any other. The processing requirements to make one unit of each product are shown in the table. Weekly product demand for the next planning period has been forecasted as follows: 80 E-1000s; 65 S-2000s; 35 P-2000s; and 20 N-1000s. | Processing Time (Minutes Per Printer) | Model | Machine 1 | Machine 2 | Machine 3 | Machine 4 | E-1000 (E) | 10 | 15 | 15 | 5 | S-2000 (S) | 10 | 10 | 10 | 10 | P-2000 (P) | 5 | 10 | 15 | 10 | N-1000 (N) | 5 | 5 | 5 | 10 | 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.
46. Use the information in Table 7.6. Which machine is the bottleneck operation?
Machine 3 47. Use the information in Table 7.6. Using the traditional method, which product should be scheduled first?
Product E
48. Use the information in Table 7.6. Using the traditional method, in what sequence should products be scheduled for production?
E, S, P, N
49. Use the information in Table 7.6. Using the traditional method, what is the optimal
The assembly line needs to produce 6 units per hour and there is room for only four workstations. The tasks and the order in which they must be performed are shown in the following table. Tasks cannot be split, and it would be too expensive to duplicate any task.
Q.1) Compute the following quantities for the current production process as well as for Mike’s and Ike’s plans, assuming the plans are implemented as described in the case.
[LO 1] Augustana received $10,000 of qualified dividends this year. Under what circumstances would all $10,000 be taxed at the same rate? Under what circumstances might the entire $10,000 of income not be taxed at the same rate?
If Marlene Herbert were to discontinue place mats, he would miss $270,000 that will go toward Mendel paper company fixed cost. The company currently has a plant overhead that is estimated at $420,000 for the quarter. In addition to the fixed plant overhead, the plant incurs fixed selling and administrative expenses per quarter of $118,000. This draws the company to a total fixed cost of $538,000. If Marlene Herbert were to discontinue the second highest contributor to the fixed cost, he would need to increase the volume of computer paper and lower material cost to help pull the contribution margin of the lowest product up to help support the lost of a whole product line.
two allocation methods. The overhead differences are due to (1) the difference in labor vs. machine
15. Agua Company has two service departments, Maintenance and Personnel, as well as two production departments, Mixing and Finishing. Maintenance costs are allocated based on square footage while personnel costs are allocated based on number of employees. The following information has been gathered for the current year:
Peter’s Peripherals assembles multimedia upgrade kits --- sets of components for adding sound and video to desktop computers. The demand for their kits for the next four quarters is estimated in the table below. Unit manufacturing cost for each kit is $160. Holding costs on each kit is $80 per quarter. Any kit that must be delivered late is assessed a backorder cost of $120. Each worker is capable of finishing 10 kits per quarter. If the company chooses to vary work force levels, it will incur costs of $400 for each additional worker; $600 for each termination. The company currently has 28 employees.
Each week there are 300 pounds of material 1; 400 pounds of material 2; and 200 hours of labor. The output of product A should not be more than one-half of the total number of units produced. Moreover, there is a standing order of 10 units of product C each week.
According our estimation from day 640 to 730, we had the mean 14.098 drums. Hence, we set the capacity number to 15 and let the production non-stop by adjusting higher order number and 200 quantity per truck. Let’s summary our work as the following: Our process: figure out whether we should build factory and warehouse in specific region. estimate the demand of four region and Fargo region, change capacity, adjust order point, quantity, and priority order, check and adjust parameters from time to time
Based on the demand forecast, we will follow the Aggregate Planning methodology for planning production in an intermediate term, one year. We consider this model adequate, because demand presents variations of +/- 20% in the job shop and more than +/- 30% in the line flow.
The following sections will discuss the specific production schedule, the ranges in which the results apply, and how results may
13. Young & Company uses a Material Requirement Planning (MRP) system for its product X. 110 units of X are required in week 10 (90 firm orders and 20 forecast). The bill of material for X and the inventory record file are as follows: