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Oakland Precision Products ( OPP ) manufactures, and sells a variety of skills for kitchen and office. ( This is the entire problem, I have
Oakland Precision Products OPP manufactures, and sells a variety of skills for kitchen and office. This is the entire problem, I have no more information Oakland Precision Products OPP manufactures and sells a variety of scales for the kitchen and office. OPP sells primarily to kitchenware stores, discount stores, and so on Two of the scales it produces for kitchen use are the Cook and Baker. The Cook is a basic food scale. The Baker has a greater capacity and special features that facilitate adjusting baking recipes for more or fewer people. The following information is available: The average wage rate is $ per hour. Variable overhead varies with the quantity of direct laborhours. The plant has a capacity of direct laborhours, but current production uses only direct laborhours.a A nationwide kitchenware chain has offered to buy Cook models and Baker models if the price is lowered to $ and Required: $ respectively, per unit. a If OPP accepts the offer, how many direct laborhours will be required to produce the additional scales? a Complete the following table to determine the differential profit increase or decrease if OPP accepts this proposal. Prices on regular sales will remain the same. b Suppose that the kitchenware chain has offered instead to buy Cook models at $ per unit and Baker models at $ This customer will purchase the models only in an allornothing deal. That is OPP must provide all units of the Cook model and units of the Baker model or nothing at all. In view of its capacity constraints, OPP will reduce sales to regular customers as needed to fill the special order. Complete the table below to determine the total contribution margin with the special b How much will the profits change if the order is accepted? Assume that the company cannot increase its production capacity to order added. c Assume that, in the situation presented in requirement b the plant can work overtime. Direct labor costs for the overtime meet the extra demand production increase to $ per hour. Variable overhead costs for overtime production are $ per hour more than for normal production. Complete the table below to determine the total contribution margin. c How much will the profits change in this situation compared to the capacity constraints scenario in requirement b
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