Direct materials $ 5.00 Direct labor 3.00 Variable overhead 6.00 Fixed overhead 7.00 Manufacturing product cost $ 21.00

Product Decisions Under Bottlenecked Operations Youngstown Glass Company manufactures three types of safety plate glass: large, medium, and small. All three products have high demand. Thus, Youngstown Glass is able to sell all the safety glass it can make. The production process includes an autoclave operation, which is a pressurized heat treatment. The autoclave is a production bottleneck. Total fixed costs are $167,000 for the company as a whole. In addition, the following information is available about the three products:   Large Medium Small Unit selling price $381   $209   $199   Unit variable cost 300   171   175   Unit contribution margin $ 81   $ 38   $ 24   Autoclave hours per unit 6   4   2   Total process hours per unit 18   8   6   Budgeted units of production 2,600   2,600   2,600   a.  Determine the contribution margin by glass type and the total company income from operations for the budgeted units of production.   Large Medium Small Total Units…

Pertinent transfer price, perfect and imperfect markets. Mountaineer, Inc., has two divisions, A and B, that manufacture expensive bicycles. Division A produces the bicycle frame, and division B assembles the rest of the bicycle onto the frame. There is a market for both the subassembly and the nal product. Each division has been designated as a prot center. The transfer price for the subassembly has been set at the long-run average market price. The following data are available for each division:

Identifying Relevant Costs Svahn, AB, is a Swedish manufacturer of sailing yachts. The company has assembled the information shown below that pertains to two independent decision-making contexts called Case A and Case B: Case A: The company chronically has no idle capacity and the old Model B100 machine is the company’s constraint. Management is considering purchasing a Model B300 machine to use in addition to the company’s present Model B100 machine. The old Model B100 machine will continue to be used to capacity as before, with the new Model B300 machine being used to expand production. This will increase the company’s production and sales. The increase in volume will be large enough to require increases in fixed selling expenses and in general administrative overhead, but not in the fixed manufacturing overhead. Case B: The old Model B100 machine is not the company’s constraint, but management is considering replacing it with a new Model B300 machine because of the potential savings…