Product mix and overtime decisions Refer to the data for Crimson Components LO 1, 2 Company presented in Problem 5-42. The following additional information is available:

■ The company believes that it cannot change its selling prices.

■ All manufacturing support costs described in Problem 5-42 are variable costs.

■ All nonmanufacturing costs are fixed.

■ The plant has a capacity of 80,000 casting department machine hours and 120,000 machining department machine hours on a single-shift basis.

■ Estimated demand for the next year is 600,000 units of R361 and 800,000 units of R572.

REQUIRED

(a) Determine the total casting department machine hours and machining de¬ partment machine hours required to produce all of the estimated demand for the next year. In which department is the capacity inadequate to meet esti¬ mated demand?

(b) Determine the contribution margins for the two products based on your analysis for requirement

(b) in Problem 5-42.

(c) Determine the contribution per machine hour for the department(s) in which capacity is inadequate. Given the capacity constraints), determine the pro¬ duction levels for the two products that will maximize profits.

(d) Either or both of the casting and machining departments can be worked overtime. Direct labor cost per unit would be higher by 50% due to the overtime premium. Manufacturing support costs per unit would be the same for overtime production as for normal production. Is it worthwhile operating either department overtime? Explain.
(LO 2, 3)