11.7

Youngstown Glass Company manufactures three types of safety plate glass: large, medium, and small. All three products have high demand. Thus, Youngstown Glass is able to sell all the safety glass that it can make. The production process includes an autoclave operation, which is a pressurized heat treatment. The autoclave is a production bottleneck. Total fixed costs are $139,000 for the company as a whole. In addition, the following information is available about the three products:

	Large		Medium		Small
Unit selling price	$216		$94		$548
Unit variable cost	(170)		(77)		(482)
Unit contribution margin	$ 46		$ 17		$ 66
Autoclave hours per unit	4		2		6
Total process hours per unit	8		4		18
Budgeted units of production	2,400		2,400		2,400

a. Determine the contribution margin by glass type and the total company operating income for the budgeted units of production.

	Large	Medium	Small	Total
Units produced	___	___	___
Revenues	$___	$___	$___	$___
Variable costs	___	___	___	___
Contribution margin	$___	$___	$___	$___
Fixed costs				____
Operating income				$_____b.

Prepare an analysis showing which product is the most profitable per bottleneck hour. Round the "Unit contribution margin per production bottleneck hour" amounts to the nearest cent.

	Large	Medium	Small
Contribution margin	$___	$___	$___
Autoclave hours per unit	___	___	___
Unit contribution margin per production bottleneck hour	$___	$__	$____