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Part 3 contains 2 Decision making recommendations that are independent of each other. Covers material in Module 17. Make sure you show your work. Decision
Part 3 contains 2 Decision making recommendations that are independent of each other. Covers material in Module 17. Make sure you show your work. Decision Making #1-Sell or Process Further Joint Product Decision XYZ manufactures A and B from a joint process cost = $70,000. Six thousand pounds of A can be sold at split-off for $20 per pound or processed further at an additional cost of $10,000 and then sold for $22. Ten thousand pounds of B can be sold at split-off for $15 per pound or processed further at an additional cost of $12,000 and later sold for $18. Required: Which products should be processed further or not? Why? Give the total dollar impact to income for each product based on your recommendation. I am not looking for per unit information, but how each decision will impact the company's income in total. Recommendation: Decision making #2-Use of Limited Resources-Singe Constraint Bush Manufacturing has 31,000 labor hours available for producing M and N. Consider the following information: M N Required Labor per unit in hours Maximum demand in units Contribution Margin per unit - 2 8,000 $8 6,000 $9.00 Required: What is the optimal product mix(how many M and N should be produced)? You must provide the number of units to produce for each product at the optimal product mix and explain your answer and show computations. Recommendation
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