Need help on last part
AUSTIN ENTERPRISES Basic 30 $ 20,000 Classic 64 $ 10,000 Formal 190 30,000 Product information: Sales price Maximum annual demand (units) Input requirement per unit Direct material (yards) Direct labor (hours) 0.5 0.3 2.0 0.6 7.0 0.7 Costs: Variable costs Materials (per yard) Direct labor (per hour) Factory overhead (per direct-labor hour) Marketing (percent of sales price) Annual fixed costs Manufacturing Marketing Administration 10% 36,000 8,000 30,000 30,000 Additional Information: Maximum direct labor-hours per year Requiremente: Additional production hours provided by running extra shift Direct labor costs per hour including extra shift 10,000 19 AUSTIN ENTERPRISES Requirement a: Basic 600,000 Classic 640,000 Formal 5,700,000 $ $ $ $ Total revenue Less variable manufacturing costs: Direct materials Direct labor Variable overhead Variable marketing Total costs Contribution margin 200,000 $ 224.000 56,000 60,000 540,000 60,000 $ Correct! 60,000 320,000 80.000 64,000 000 524,000 116,000 Correctl $ 360,000 3,360,000 840,000 570.000 5,130,000 570,000 Correcti 746,000 74,000 672,000 Correct! $ Total contribution margin Total fixed costs Total operating profit $ Requirement b: $ 00 Omsomst Basic 60,000 $ 20,000 3.000 $ Total contribution margin Total demand Contribution margin per unit Hours allowed per unit Contribution margin per labor hour Classic 116,000 10,000 1.600 0 2. 5.800 Correct! $ Formal 570,000 30,000 19.000 7 .0 2.714 Correct! 0.7 4.286 Correct! $ $ Requirement c: Most profitable product per labor hour: (enter name): Units produced to meet demand Labor hours per unit Total labor hours for most profitable product Classic 10,000 Next most profitable product: (enter name) Remaining available labor hours Labor hours per unit Units produced of next most profitable product 20,000 Correct! Basic 10,000 0.7 14,285 Correct - time Summary: Units produced of most profitable Units produced of second most profitable Total units produced 10,000 14,285 24,285 Requirement d: Basic 428,550 Classic 640,000 $ Total 1,068,550 $ $ $ Total revenue Less variable manufacturing costs: Direct materials Direct labor Variable overhead Variable marketing Total costs Contribution margin Total fixed costs Total operating profit 142,850 159,992 39,998 42,855 385,695 42,855 Correct! 202,850 479,992 119,998 106,855 60,000 $ 320,000 $ 80,000 $ 64,000 $ 524,000 116.000 $ Correct! $ $ 158,855 74,000 84.855 Correct! Requiremente: Decision to add shift to product more Basic and/or Formal Contribution margin per unit $ Basic 3.00 Correct $ Classic 11.60 Correct! $ Formal 19.00 Correct! Additional labor cost at higher rate Hours to produce one unit Contribution per labor hour for extra cost 0.7 2.0 7.0 New contribution margin per labor hour Demand (for profitable products only) Present production (from Requirement c) Amount to produce on new shift Contribution margin per unit of new production Additional operating profit (rounded)
