austin enterprises makes and sells three types of dress shirts

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Saved Help Save Problem 4-71 (Algo) Optimum Product Mix (LO 4-4) Austin Enterprises makes and sells three types of dress shirts. Management is trying to determine the most profitable mix. Sales prices demand, and use of manufacturing inputs follow. $ Basic 36 24,000 $ Classic 70 14,000 $ Formal 180 34,000 Sales price Maximum annual demand (units) Input requirement per unit Direct material Direct labor 0.9 yards 0.7 hours 0.3 yards 2 hours 0.6 yards 8 hours $ $ Costs Variable costs Materials Direct labor Factory overhead Marketing Annual fixed costs Manufacturing Marketing Administration 18 per yard 14 per hour 3 per direct labor-hour 10 # of sales price $40,000 $10,000 $34,000 The company faces two limits: (1) the volume of each type of shirt that it can sell (see maximum annual demand) and (2) 38,500 direct labor-hours per year caused by the plant layout. Required: a-1. Assuming the company can satisfy the annual demand, calculate the contribution margin for each type of dress shirt using the Help Save & b-2. Which of the three product lines makes the most profitable use of the constrained resource, direct labor? c. Given the information in the problem so far, what product mix do you recommend? d-1. Calculate the contribution margin for each type of dress shirt using the table below. d-2. How much operating profit should your recommended product mix generate? e. Suppose that the company could expand its labor capacity by running an extra shift that could provide up to 12,000 more hours. The direct labor cost would increase from $14 to $18 per hour for all hours of direct labor used during the additional shift. What additional product(s) should Austin manufacture and what additional profit would be expected with the use of the added shift? Complete this question by entering your answers in the tabs below. Req A1 Req A2 Req B1 Req B2 Reg C Reg D1 Reg D2 ReqE Calculate the contribution margin for each type of dress shirt using the table below. Basic Classic Total revenue Less variable manufacturing costs: Total costs Contribution margin 0 0 0 0 $ $ Saved Help Save The company faces two limits: (1) the volume of each type of shirt that it can sell (see maximum annual demand) and (2) 38,500 direct labor-hours per year caused by the plant layout. Required: a-1. Assuming the company can satisfy the annual demand, calculate the contribution margin for each type of dress shirt using the table below 3-2. How much operating profit could the company earn if it were able to satisfy the annual demand? b-1. Compute the contribution margin for each shirt per the constrained resource, direct labor. b-2. Which of the three product lines makes the most profitable use of the constrained resource, direct labor? C. Given the information in the problem so far, what product mix do you recommend? d-1. Calculate the contribution margin for each type of dress shirt using the table below. d-2. How much operating profit should your recommended product mix generate? e. Suppose that the company could expand its labor capacity by running an extra shift that could provide up to 12.000 more hours. The direct labor cost would increase from $14 to $18 per hour for all hours of direct labor used during the additional shift. What additional product(s) should Austin manufacture and what additional profit would be expected with the use of the added shift? Complete this question by entering your answers in the tabs below. Req A1 Req AZ Req B1 Req B2 Reqc Reqdi Reg D1 Reg oz | Rege Reg D2 Red E How much operating profit should your recommended product mix generate? Operating profit (Reg D1 Reqe Help Save & CHI 3-2. How much operating profit could the company earn if it were able to satisfy the annual demand? b-1. Compute the contribution margin for each shirt per the constrained resource, direct labor. b-2. Which of the three product lines makes the most profitable use of the constrained resource, direct labor? C. Given the information in the problem so far, what product mix do you recommend? d-1. Calculate the contribution margin for each type of dress shirt using the table below. d-2. How much operating profit should your recommended product mix generate? e. Suppose that the company could expand its labor capacity by running an extra shift that could provide up to 12.000 more hours. The direct labor cost would increase from $14 to $18 per hour for all hours of direct labor used during the additional shift. What additional product(s) should Austin manufacture and what additional profit would be expected with the use of the added shift? Complete this question by entering your answers in the tabs below. Req A1 Req A2 Reg B1 Reg B2 Reqc Reg D1 Reg D2 Reg E Suppose that the company could expand its labor capacity by running an extra shift that could provide up to 12,000 more hours. The direct labor cost would increase from $14 to $18 per hour for all hours of direct labor used during the additional shift, What additional product(s) should Austin manufacture and what additional profit would be expected with the use of the added shift? (Round your final answer to 2 decimal places.) Show less Austin should manufacture Additional profit would be