XYZ Drinks makes three products: iced tea, soda, and lemonade. The following data are available: Iced Tea Soda Lemonade Sales price per unit P9.00 P6.00 P5.00 Variable cost per unit 3.00 1.50 1.00 Contribution margin per unit P6.00 P4.50 P4.00 XYZ is experiencing a bottleneck in one of its processes that affects each product as follows: Iced Tea Soda Lemonade Bottleneck process hours per unit 3 3 4 The business cannot vary the selling price of Iced Tea and Lemonade. In determining the optimal production plan, what is the order of priority?
XYZ Drinks makes three products: iced tea, soda, and lemonade. The following data are available: Iced Tea Soda Lemonade Sales price per unit P9.00 P6.00 P5.00 Variable cost per unit 3.00 1.50 1.00 Contribution margin per unit P6.00 P4.50 P4.00 XYZ is experiencing a bottleneck in one of its processes that affects each product as follows: Iced Tea Soda Lemonade Bottleneck process hours per unit 3 3 4 The business cannot vary the selling price of Iced Tea and Lemonade. In determining the optimal production plan, what is the order of priority?
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter20: Inventory Management: Economic Order Quantity, Jit, And The Theory Of Constraints
Section: Chapter Questions
Problem 17E
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XYZ Drinks makes three products: iced tea, soda, and lemonade. The following data are available:
|
|
Iced Tea |
Soda |
Lemonade |
|
Sales price per unit |
P9.00 |
P6.00 |
P5.00 |
|
Variable cost per unit |
3.00 |
1.50 |
1.00 |
|
Contribution margin per unit |
P6.00 |
P4.50 |
P4.00 |
XYZ is experiencing a bottleneck in one of its processes that affects each product as follows:
|
|
Iced Tea |
Soda |
Lemonade |
|
Bottleneck process hours per unit |
3 |
3 |
4 |
The business cannot vary the selling price of Iced Tea and Lemonade.
In determining the optimal production plan, what is the order of priority?
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