Bountiful Manufacturing produces 2 types of bike frames (Frame X and Frame Y). Frame X passes through 4 processes: cutting, welding, polishing, and painting. Frame Y uses three of the same processes: cutting, welding, and painting. Each of the four processes employs 10 workers who work 8 hours each day. That is, cutting employs 10 workers; welding employs 10 workers; polishing employs 10 workers; and painting employs 10 workers. The labor skills required in each process are specialized and cannot be switched from one process to another. Employees are paid a fixed monthly salary. Frame X sells for $40 per unit, and Frame Y sells for $55 per unit. Raw materials is the only unit-level variable cost (labor cost is fixed cost). The materials cost for Frame X is $20 per unit, and the materials cost for Frame Y is $25 per unit. Bountiful's accounting system has provided the following additional information about its operations and products:

Resource Name	Resource Available	Frame X Resource Usage per Unit	Frame Y Resource Usage per Unit
Cutting labor	4,800	15 minutes	10 minutes
Welding labor	4,800	15 minutes	30 minutes
Polishing labor	4,800	15 minutes
Painting labor	4,800	10 minutes	15 minutes
Market demand:
Frame X	200 per day
Frame Y	100 per day

Required:

a) Assuming that Bountiful can meet daily market demand, compute the potential daily contribution margin. Now compute the minutes needed to meet the daily market demand for each process, including cutting; welding; polishing; and painting, separately. Can Bountiful meet daily market demand? If not, which one of the four processes is the bottleneck?

b) Determine the optimal mix and the maximized daily contribution margin.

Hint: Allocate the available resources (labor minutes) for the process that is the bottleneck to maximize the contribution margin. If a process is not the bottleneck, then its resources (labor minutes) are not constrained.

c) Suppose that the Engineering Department has proposed a process design change that will increase the polishing time for Frame X from 15 to 23 minutes per unit and decrease the welding time from 15 minutes to 9 minutes per unit (for Frame X). The cost of process redesign would be $10,000. Evaluate this proposed change.

Hint: To answer part c, answer the following sub-questions: (i) What is the daily contribution margin if Bountiful implements the proposed process design change? (ii) What is the increase in daily contribution margin compared to the current contribution margin you calculated in part b? (iii) How many days does it take for Bountiful to recover the cost of process redesign, i.e., $10,000?