Sales price Direct materials 58 62 76 12 13 14 Direct labor 5 9. Variable manufacturing overhead Fixed manufacturing overhead 6. Required number of labor hours Required number of machine hours 0.50 0.50 1.00 4.00 2.50 2.00 Blossom has determined that it can sell a limited number of each table in the upcoming year. Expected demand for each model follows: Table A 60,000 units 20,000 units 20,000 units Table B Table C Required: 1. Suppose that direct labor hours has been identified as the bottleneck resource. Determine how Blossom should prioritize production by rank ordering the products from 1 to 3. 2. If Blossom has only 50,000 direct labor hours available, calculate the number of units of each table that Blossom should produce to maximize its profit. 3. Suppose that the number of machine hours has been identified as the most constrained resource. Determine how Blossom should prioritize production by rank ordering the products from 1 to 3. 4. If Blossom has only 250,000 machine hours available, calculate the number of units of each table that Blossom should produce to maximize its profit.
Sales price Direct materials 58 62 76 12 13 14 Direct labor 5 9. Variable manufacturing overhead Fixed manufacturing overhead 6. Required number of labor hours Required number of machine hours 0.50 0.50 1.00 4.00 2.50 2.00 Blossom has determined that it can sell a limited number of each table in the upcoming year. Expected demand for each model follows: Table A 60,000 units 20,000 units 20,000 units Table B Table C Required: 1. Suppose that direct labor hours has been identified as the bottleneck resource. Determine how Blossom should prioritize production by rank ordering the products from 1 to 3. 2. If Blossom has only 50,000 direct labor hours available, calculate the number of units of each table that Blossom should produce to maximize its profit. 3. Suppose that the number of machine hours has been identified as the most constrained resource. Determine how Blossom should prioritize production by rank ordering the products from 1 to 3. 4. If Blossom has only 250,000 machine hours available, calculate the number of units of each table that Blossom should produce to maximize its profit.
Survey of Accounting (Accounting I)
8th Edition
ISBN:9781305961883
Author:Carl Warren
Publisher:Carl Warren
Chapter12: Differential Analysis And Product Pricing
Section: Chapter Questions
Problem 12.16E: Product cost concept of product pricing Based on the data presented in Exercise 12-15, assume that...
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Can you verify the amount for table A (4,000) on the Required #4 is correct, if not can you explain, thank you!
Transcribed Image Text:Sales price
Direct materials
58
62
76
12
13
14
Direct labor
5
9.
Variable manufacturing overhead
Fixed manufacturing overhead
6.
Required number of labor hours
Required number of machine hours
0.50
0.50
1.00
4.00
2.50
2.00
Blossom has determined that it can sell a limited number of each table in the upcoming year. Expected demand
for each model follows:
Table A
60,000 units
20,000 units
20,000 units
Table B
Table C
Required:
1. Suppose that direct labor hours has been identified as the bottleneck resource. Determine how Blossom should
prioritize production by rank ordering the products from 1 to 3.
2. If Blossom has only 50,000 direct labor hours available, calculate the number of units of each table that
Blossom should produce to maximize its profit.
3. Suppose that the number of machine hours has been identified as the most constrained resource. Determine
how Blossom should prioritize production by rank ordering the products from 1 to 3.
4. If Blossom has only 250,000 machine hours available, calculate the number of units of each table that Blossom
should produce to maximize its profit.
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