Canine Kennels Company (CKC) manufactures two different types of dog chew toys (A and B, sold...
Fantastic news! We've Found the answer you've been seeking!
Question:
![image text in transcribed](https://s3.amazonaws.com/si.experts.images/answers/2024/05/6658a2a51135c_8376658a2a507b73.jpg)
Transcribed Image Text:
Canine Kennels Company (CKC) manufactures two different types of dog chew toys (A and B, sold in 1,000-count boxes) that are manufactured and assembled on three different workstations (W, X, and Y) using a small-batch process (see the figure below). Batch setup times are negligible. The flowchart denotes the path each product follows through the manufacturing process, and each product's price, demand per week, and processing times per unit are indicated as well. Purchased parts and raw materials consumed during production are represented by inverted triangles. CKC can make and sell up to the limit of its demand per week; no penalties are incurred for not being able to meet all the demand. Each workstation is staffed by a worker who is dedicated to work on that workstation alone and is paid $7 per hour. Total labor costs per week are fixed. Variable overhead costs are $3,500/week. The plant operates one 8-hour shift per day, or 40 hours/week. Product A $3 Step 1 Station W (10 min) Step 2 Station X Step 3 Station Y (10 min) (13 min) Raw materials $5 Purchased part Product B $6 Step 1 Station X (20 min) Step 2 Station W (13 min) Step 3 Station Y (11 min) Raw materials Product: A Price: $60/unit Demand: 80 units/wk Product: B Price: $75/unit Demand: 85 units/wk Purchased part $9 The senior management is concerned with the existing capacity limitation, so they want to accept the mix of orders that maximizes the company's profit. Traditionally, CKC has utilized a method whereby decisions are made to produce as much of the product with the highest contribution margin as possible (up to the limit of its demand), followed by the next highest contribution product, and so on until no more capacity is available. Because capacity is limited, choosing the proper product mix is crucial. Troy Hendrix, the newly hired production supervisor, is an avid follower of the theory of constraints philosophy and the bottleneck method for scheduling. He believes that profitability can indeed be improved if bottleneck resources are exploited to determine the product mix. a. What is the profit if the traditional contribution margin method is used for determining CKC's product mix? The profit with the traditional approach is $ (Enter your response rounded to the nearest whole number.) Canine Kennels Company (CKC) manufactures two different types of dog chew toys (A and B, sold in 1,000-count boxes) that are manufactured and assembled on three different workstations (W, X, and Y) using a small-batch process (see the figure below). Batch setup times are negligible. The flowchart denotes the path each product follows through the manufacturing process, and each product's price, demand per week, and processing times per unit are indicated as well. Purchased parts and raw materials consumed during production are represented by inverted triangles. CKC can make and sell up to the limit of its demand per week; no penalties are incurred for not being able to meet all the demand. Each workstation is staffed by a worker who is dedicated to work on that workstation alone and is paid $7 per hour. Total labor costs per week are fixed. Variable overhead costs are $3,500/week. The plant operates one 8-hour shift per day, or 40 hours/week. Product A $3 Step 1 Station W (10 min) Step 2 Station X Step 3 Station Y (10 min) (13 min) Raw materials $5 Purchased part Product B $6 Step 1 Station X (20 min) Step 2 Station W (13 min) Step 3 Station Y (11 min) Raw materials Product: A Price: $60/unit Demand: 80 units/wk Product: B Price: $75/unit Demand: 85 units/wk Purchased part $9 The senior management is concerned with the existing capacity limitation, so they want to accept the mix of orders that maximizes the company's profit. Traditionally, CKC has utilized a method whereby decisions are made to produce as much of the product with the highest contribution margin as possible (up to the limit of its demand), followed by the next highest contribution product, and so on until no more capacity is available. Because capacity is limited, choosing the proper product mix is crucial. Troy Hendrix, the newly hired production supervisor, is an avid follower of the theory of constraints philosophy and the bottleneck method for scheduling. He believes that profitability can indeed be improved if bottleneck resources are exploited to determine the product mix. a. What is the profit if the traditional contribution margin method is used for determining CKC's product mix? The profit with the traditional approach is $ (Enter your response rounded to the nearest whole number.)
Expert Answer:
Posted Date:
Students also viewed these accounting questions
-
A 10-ft3 tank contains oxygen initially at 14.7 psia and 80F. A paddle wheel within the tank is rotated until the pressure inside rises to 20 psia. During the process 20 Btu of heat is lost to the...
-
Clarence Oil and Gas Corporation agreed to conduct G&G studies and other exploration activities on a lease owned by Charles Energy Company in exchange for an interest in the property if proved...
-
Parisian Accessories Inc. produces womens handbags. The cost of producing 800 hand-bags is as follows: Direct materials ..........$ 15,000 Direct labor ............. 7,000 Factory overhead .............
-
2. (15 points) For the following series, determine whether the given series con the relevant series, determine whether the given series converges absolutely, converges conditionally, or diverges. 8...
-
The graph of a function is given. y 5 3 X 1 S (a) Determine the net change between the indicated points on the graph. -1/2 X (b) Determine the average rate of change between the indicated points on...
-
The following investing transactions by Lateral Inc. took place during the current year. 1. On January 1, purchased 500 Pincus Corporation bonds for $564,000 cash. The bonds have a face value of...
-
You will capitalize the project with a 70% first mortgage based on the purchase price, a mezz loan equal to 50% of the equity after application of the first mortgage with 90% of the remaining equity...
-
How is this done in excel and also on a financial calculator? Microsoft had stock prices of $47, $41, $28, $42, and $57 at the end of the last five quarters. If Microsoft pays a dividend of $1.50 at...
-
Firm C is considering the acquisition of Firm T. Firm C has estimated the cash flows, cost of capital, and growth rate for firm T shown below. Answer the following questions to estimate the current...
-
Firm C currently has 250,000 shares outstanding with current market value of $42.00 per share and generates an annual EBIT of $1,250,000. Firm C also has $1 million of debt outstanding. The current...
-
A block of mass m is sliding on a horizontal surface. The kinetic coefficient of friction between the block and the surface is uk. The drag force is linear with speed (FD = -lv, where l is a...
-
Cheatham and Howe is a law firm that is initiating an activity-based costing sys- tem. Jim Cheatham, the senior partner and strong supporter of ABC, has prepared the following list of activities...
-
Paul DiGiovanni & Sons, Inc. is a small manufacturing company in Balboa that uses activity-based costing. DiGiovanni & Sons accumulates overhead in the following activity cost pools. Instructions For...
-
Curly-Soo, Inc. manufactures hair curlers and blow-dryers. The handheld hair curler is Curly-Soo's high volume product (80,000 units annually). It is a "large barrel," 20-watt, triple-heat appliance...
![Mobile App Logo](https://dsd5zvtm8ll6.cloudfront.net/includes/images/mobile/finalLogo.png)
Study smarter with the SolutionInn App