Buck Products, located in Charleston, South Carolina,produces two lines of electric toothbrushes: Deluxe and Standard. Because Buck can sell all the toothbrushes it produces, the owners are expanding the plant. They are deciding which product line to emphasize. To make this decision, they assemble the following data: Per Unit Deluxe Toothbrush Standard Toothbrush Sales price. . . . . . . . . . . . . . . . . . Deluxe $92 Standard $44 Variable expenses. . . . . . . . . . . . Deluxe 22 Standard 15 Contribution margin. . . . . . . . . . Deluxe $70 Standard $29 Contribution margin ratio. . . . . . Deluxe 76.1% Standard 65.9% After expansion, the factory will have a production capacity of 4,800 machine hours per month. The plant can manufacture either 56 Standard electric toothbrushes or 27 Deluxe electric toothbrushes per machine hour. Requirements 1. Identify the constraining factor for Buck Products. 2. Prepare an analysis to show which product line to emphasize. Requirement 1. Identify the constraining factor for Buck. Buck's constraint is ▼ direct materials labor hours machine hours Requirement 2. Prepare an analysis to show which product line to emphasize. Buck Products Product Mix Analysis Deluxe Standard Decision: ▼ Emphasize the Buck Deluxe electric toohbrushes. Emphasize the Buck Standard electric toohbrushes

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter8: Tactical Decision-making And Relevant Analysis

Section: Chapter Questions

Problem 40E

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Buck Products, located in Charleston, South Carolina,produces two lines of electric toothbrushes: Deluxe and Standard. Because

Buck can sell all the toothbrushes it produces, the owners are expanding the plant. They are deciding which product line to emphasize. To make this decision, they assemble the following data:

Per Unit

Deluxe Toothbrush

Standard Toothbrush

Sales price. . . . . . . . . . . . . . . . . .

Deluxe $92

Standard $44

Variable expenses. . . . . . . . . . . .

Deluxe 22

Standard 15

Contribution margin. . . . . . . . . .

Deluxe $70

Standard $29

Contribution margin ratio. . . . . .

Deluxe 76.1%

Standard 65.9%

After expansion, the factory will have a production capacity of

4,800

machine hours per month. The plant can manufacture either

Standard electric toothbrushes or

Deluxe electric toothbrushes per machine hour.

Requirements

1.	Identify the constraining factor for Buck Products.
2.	Prepare an analysis to show which product line to emphasize.

Requirement 1. Identify the constraining factor for

Buck.

Buck's

constraint is

▼

direct materials

labor hours

machine hours

Requirement 2. Prepare an analysis to show which product line to emphasize.

Buck Products
Product Mix Analysis
	Deluxe	Standard

Decision:

▼

Emphasize the Buck Deluxe electric toohbrushes.

Emphasize the Buck Standard electric toohbrushes.

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