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need help with the last part on what factors to consider. thank you. Rodeo Printers operates a printing press with a monthly capacity of 2,000
need help with the last part on what factors to consider. thank you.
Rodeo Printers operates a printing press with a monthly capacity of 2,000 machine-hours. Rodeo has two main customers: Scott Corporation and Diane Corporation. Data on each customer for January are: E: (Click to view the data.) (Click the icon to view the special order information.) Read the requirements C. Begin by calculating the amount that should be used to determine the allocation. Scott Corporation Diane Corporation Contribution margin per machine-hour $ 48 $ 60 Since the contribution margin per machine-hour of Diane is greater than the contribution margin per machine-hour of Scott, to maximize operating income Rodeo should first allocate the capacity needed to take all of the Diane Corporation business and then allocate the remaining to Scott Corporation. Total . Data table Now calculate the operating income using the allocation you determined above. Scott Corporation Diane Corporation Contribution margin per machine-hour $ 48 $ 60 x Machine-hours to be worked 1,000 1,000 Contribution margin $ 48,000 $ 60,000 Total 108,000 100,000 Scott Diane Corporation Corporation $ 142,500 $ 95,000 $ 70,500 65,000 Fixed costs Revenues 237,500 135,500 8,000 Operating income Variable costs Contribution margin What other facto Rodeo consider before making a decision? (Select all that apply.) 72,000 60.000 30,000 40.000 102,000 100,000 Fixed costs (allocated) $ 12,000 $ (10,000) $ 2,000 Operating income Machine-hours required 1.500 hours 500 hours 2.000 hours O A. Will both corporations continue to demand the same level of business going forward? B. Rodeo's managers need to consider long-run effects of their decision and then decide whether it should accept one company's business at the cost of the other. C. If Rodeo turns down one of the company's business, will that company continue to place orders with Rodeo or seek alternative suppliers? ID. Will turning down the business of one company affect customer satisfaction? E. Choosing customers is a strategic decision that should primarily involve the analysis of the short-term effects of making a decision. OF. If Rodeo sees long-run benefit in working with the company that provides the greatest profit, then Rodeo does not need to be concerned about turning down the business of the other company. OG. If Rodeo sees long-run benefit in working with the company that provides the least profit, then Rodeo must also look for ways to increase the profitability of the business it does with that company. Print DoneStep by Step Solution
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