Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Completion Status: 2 uestion 2 4 10 points Save Answer Bahrain Rubber Company (BRC) manufactures a line of speed humps. Demand for the company's products

Completion Status: 2 uestion 2 4 10 points Save Answer Bahrain Rubber Company (BRC) manufactures a line of speed humps. Demand for the company's products is increasing, and management requests assistance from you in determining an economical sales and production mix for the coming year. The company provided the following data: Medium bumps size Product Demand next year (units) Selling price Direct materials Direct labor Direct labor hours per unit The following additional information is available: Small humps size 50,000 $16.70 $4.30 56.40 0.40 35,000 $26.60 56.44 $11.20 0.70 Large humps size 325,000 $9.60 $3.20 $3.20 0.2 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 equipment can produce all three 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? 2. Assuming that direct labor-hours is the company's constraining resource, what is the contribution margin per direct labor-hour for each of the company's three 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). BIUS Paragraph Arial 10pt Ev A IX 1

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Cima Official Learning System Fundamentals Of Business Mathematics

Authors: Graham Eaton

4th Edition

1856177831, 978-1856177832

More Books

Students also viewed these Accounting questions

Question

1. What are the pros and cons of diversity for an organisation?

Answered: 1 week ago

Question

1. Explain the concept of diversity and equality in the workplace.

Answered: 1 week ago