Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

PLEASE ANSWER ALL PARTS a , b , c , d and e Andy s Bicycle Company ( ABC ) has the hottest new product

PLEASE ANSWER ALL PARTS a,b,c,d and e Andys Bicycle Company (ABC) has the hottest new product on the upscale toy market boys and girls bikes in bright fashion colors, with oversize hubs and axles; shell design safety tires; strong padded frames; chrome-plated chains, brackets, and valves; and non-slip handlebars. Due to the sellers market for high-quality toys for the newest baby boomers, ABC can sell all the bicycles it manufactures at the following prices: boys bikes, $220; girls bikes, $175. This is the price payable to ABC at its Orlando plant. The firms accountant, V. R. Dondeti, has determined that direct labor costs will be 45% of the price that ABC receives for the boys model and 40% of the price received for the girls model. Production costs, other than labor but excluding painting and packaging, and $44 per boys bicycle and $30 per girls bicycle. Painting and packaging are $20 per bike, regardless of model. The Orlando plants overall production capacity is 390 bicycles per day. Each boys bike requires 2.5 labor-hours, each girls model 2.4 hours. ABC currently employs 120 workers, each of whom puts in an 8-hour day. The firm has no desire to hire or fire to affect labor availability, for it believes its stable workforce is one of its biggest assets. a. What is the product allocation? b. What is the total profit? c. Are there any unused resources? d. What if you decided to reduce staffing by 5 workers, what impact would it have on profit? e. What if the reduction in staffing results in direct labor cost percentages change(2% for Boys model & 4% for the Girls model). What impact does that now have on resource allocation and profits?

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

International Management Managing Across Borders And Cultures Text And Cases

Authors: Helen Deresky

9th Global Edition

1292153539, 978-1292153537

More Books

Students also viewed these General Management questions

Question

Produce a nine-step process for conducting a literature review.

Answered: 1 week ago