Calen Co. manufactures and sells three products. The three products are manufactured in a factory consisting of four departments. Both labor and machine times are applied to the products as they pass through each applicable department. The nature of the machine processing and labor skills required in each department is such that neither machines nor labor can be switched from one department to another.

Calen's management is attempting to plan its production schedule for the next several months. The planning is complicated by the fact that there are labor shortages in the community and some machines will be down several months for repairs.

The following information regarding available machine and labor time by department and the machine hours and direct labor hours required per unit of product has been accumulated to aid in the decision. These data should be valid for at least the next six months.

{Required:}

(a) Calculate the monthly requirement for machine hours and direct labor hours for the production of products 401,403 , and 405 to determine if the monthly sales demand for the three products can be met by the factory.

(b) What monthly production schedule should Calen Co. select in order to maximize its dollar profits? Explain how you selected this production schedule, and present a schedule of the contribution to profit that would be generated by your production schedule.

(c) Identify the alternatives Calen Co. might consider so it can supply its customers with the entire product they demand.

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Department 1 2 3 4 Monthly Capacity Availability Normal machine capacity in machine hours Capacity of machine being repaired in machine hours Available machine capacity in machine hours Labor capacity in direct labor hours Available labor in direct labor hours 3,500 3,500 3,000 3,500 (500) (400) (300) (200) 3,000 3,100 2,700 3,300 4,000 4,500 3,500 3,000 3,700 4,500 2,750 2,600 Labor and Machine Specifications per Unit of Product Product Labor and Machine Time 401 Direct labor hours 2 3 3 Machine hours 1 2 2 403 Direct labor hours 1 2 0 2 Machine hours I 1 0 2 405 Direct labor hours 2 2 2 1 Machine hours 2 2 1 1