How many of each bicycle should be produced to maximize profits?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Akimoto’s Bicycle Co assembles three types of bicycles: Charger, Sublime, Kidde. Due to their residential location they operate with one 8 hour shift, 5 days per week, 50 weeks a year. Balancing the bikes is the bottleneck. The information about production time and costs for these three bicycles are (Refer the attached image)
- How many of each bicycle should be produced to maximize profits?
- What qualitative factors would you need to consider?
![Charger
Sublime
Kidde
Hours to produce
Selling price
2
1.75
0.5
$600
$300
$200
$ 50
$ 75
$ 25
Direct material
$100
$ 75
Direct labor
$150
$100
$ 50
$ 25
$ 25
$ 25
Variable overhead
Fixed overhead
$ 20](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F0c27ea78-0bda-479b-a7e1-ec2257ab2691%2F7ac549f7-d63f-4adf-9de5-6a04fa7ad51c%2Fm6yec2h_processed.png&w=3840&q=75)
Transcribed Image Text:Charger
Sublime
Kidde
Hours to produce
Selling price
2
1.75
0.5
$600
$300
$200
$ 50
$ 75
$ 25
Direct material
$100
$ 75
Direct labor
$150
$100
$ 50
$ 25
$ 25
$ 25
Variable overhead
Fixed overhead
$ 20
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