Question
A.J.s Wildlife Emporium manufactures two unique bird-feeders (Deluxe and Super Duper) that are manufactured and assembled in up to three different workstations (X, Y, Z)
A.J.s Wildlife Emporium manufactures two unique bird-feeders (Deluxe and Super Duper) that are manufactured and assembled in up to three different workstations (X, Y, Z) using a small batch process. Each of the products is produced according to the flowchart in Figure 1. Additionally, the flowchart indicates each products processing times per unit. The price of Deluxe is $82/unit and the price of Super Duper is $79/unit. Batch setup times are negligible. Each workstation is staffed by a worker who is dedicated to working at that workstation alone. The plant operates 40 hours per week, with no overtime. Overhead costs are $1,000 per week. Based on the information provided, as well as the information contained in the flowchart, answer the following questions. Always show your work leading to the answer to get credits.
A. Based solely on a products contribution margin, which product is more profitable? What is the corresponding profit per week (assume ample demand)? Fill in the blanks below. Show your work.
Product | Variable Cost (Raw Material & Parts) | Selling Price | Contribution Margin |
Deluxe |
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Super Duper |
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Answer: More profitable product based on contribution margin is ____. Corresponding profit per week is: _____
B. Using the bottleneck concept, which product is more profitable? What is the corresponding profit per week (assume ample demand)? Fill in the blanks below. In the last column of the table, fill in the proper criterion to determine profitability. Show your work. More profitable product is? Corresponding profit per week is?
Product | Variable Cost (Raw Material & Parts) | Selling Price | [fill in proper criterion for profitability] |
Deluxe |
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Super Duper |
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