Carolina Corporation manufactures and sells three different types of high- quality scaled ball bearings. The bearings vary
Question:
Carolina Corporation manufactures and sells three different types of high- quality scaled ball bearings. The bearings vary in terms of their quality specifications- primarily with respect to their smoothness and roundness. They are referred to as Fine, Extra-Fine, and Super-Fine bearings. Machine time is limited. More machine time is required to manufacture the Extra-Fine and Super-Fine bearings. Additional information is provided below.
(a) Ignoring the machine time constraint, what strategy would appear optimal?
(b) What is the contribution margin per unit of limited resource for each type of bearing?
(c) If additional machine time could be obtained, how should the additional capacity be used?
Step by Step Answer:
Accounting Tools For Business Decision Making
ISBN: 9780470377857
3rd Edition
Authors: Paul D. Kimmel