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Bahrain Rubber Company (BRC) manufactures a line of speed humps Demand for the company's product is incing, determining an economical sales and production mix for
Bahrain Rubber Company (BRC) manufactures a line of speed humps Demand for the company's product is incing, determining an economical sales and production mix for the coming year. The company provided the following data Product Mediam bags vir 3530003 Demand next year (units) Selling price Direct materials Direct labor Direct labor hours per unit The following additional information is available: Small bumps 50,000 $16.70 $4.30 56.40 0.40 $36.60 56.44 $11.20 0.70 95 $1.20 $5.20 02 a. The company's plant has a capacity 99,000 direct labor-hours per year on a single- shift basis. The company's present employees and equipement can produce all th products. b. The direct labor rate of $16 per hour is expected to remain unchanged during the coming year. c. Fixed cost total $520,000 per year. Variable overhead costs are $2 per direct labor-hour. d. All the company's nonmanufacturing costs are fixed. Activate Windows Required 1. How much variable overhead cost is incurred to manufacture one unit of each of the company's thees product 2. Assuming that direct labor-hours is the company's constraining resource, what is the contribution margin per direct labor hour for ach of the spy's products? Rank them in terms of profitability? 3. Which product has the largest contribution margin per unit? Why wouldn't this product be the most profitable use of the condi Bress ALT+F10 (PC) or ALT+FN-F10 (Mac I determining an economical sales and proaction is for the coming year The company provided the following da Product Small bunge sine Demand next year (units) 50,000 Selling price Direct materials 31670 $4.30 Direct labor Direct labor hours per unit 56.40 0.40 The following additional information is available 35,000 $26.60 56.44 $11.20 0.70 $25,000 SPA $1.20 53.20 02 a. The company's plant has a capacity 99,000 direct labor-bours per year on a single shift basis. The company's present employees and equipment can produce all t products. b. The direct labor rate of $16 per hour is expected to remain unchanged during the coming year. c. Fixed cost total $520,000 per year. Variable overhead costs are $2 per direct labor-hour d. All the company's nonmanufacturing costs are fixed. Required 1. How much variable overhead cost is incurred to manufacture one unit of each of the company's three products? Activate Windows 2. Assuming that direct labor-hours is the company's constraining resource, what is the contribution margin per direct labor-hour for dachtsfahr-gompany down products? Rank them in terms of profitability? 3. Which product has the largest contribution margin per unit? Why wouldn't this product be the most profitable use of the constrained resource in either case? For the toolbar, press ALT+F10 (PC) or ALT+FN+F10 (Mac)
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