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Blossom, Incorporated, is a small company that manufactures three versions of patio tables. Unit information for its products follows: Table A Table B Table C
Blossom, Incorporated, is a small company that manufactures three versions of patio tables. Unit information for its products follows:
Table A | Table B | Table C | ||
---|---|---|---|---|
Sales price | $ 50 | $ 54 | $ 68 | |
Direct materials | 10 | 11 | 12 | |
Direct labor | 2 | 4 | 8 | |
Variable manufacturing overhead | 4 | 4 | 4 | |
Fixed manufacturing overhead | 9 | 9 | 9 | |
Required number of labor hours | 0.50 | 0.50 | 1.00 | |
Required number of machine hours | 4.00 | 2.50 | 2.00 |
Blossom has determined it can sell a limited number of each table in the upcoming year. Expected demand for each model follows:
Table A | 50,000 | units |
---|---|---|
Table B | 25,000 | units |
Table C | 25,000 | units |
Required:
- Suppose direct labor hours have been identified as the bottleneck resource. Determine how Blossom should prioritize production by rank, i.e., ordering the products from 1 to 3.
- If Blossom has only 60,000 direct labor hours available, calculate the number of units of each table Blossom should produce to maximize its profit.
- Suppose the number of machine hours has been identified as the most constrained resource. Determine how Blossom should prioritize production by rank, i.e., ordering the products from 1 to 3.
- If Blossom has only 242,000 machine hours available, calculate the number of units of each table Blossom should produce to maximize its profit.
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