PLEASE HELP
Product A Step 1 $3 Station W (10 min) Raw materials Step 2 Station X (10 min) Step 3 Station Y (15 min) Product: A Price: $55/unit Demand: 80 units/wk Purchased party Product B $6 Step 1 Station X (20 min) Raw materials Step 2 Station W (10 min) Step 3 Station Y (11 min) Product: B Price: $70/unit Demand: 85 units/wk $10 Purchased party The senior management is concerned with the existing capacity limitation, so they want to accept the mix of orders that maximizes the company's profit. Traditionally, CKC has utilized a method whereby decisions are made to produce as much of the product with the highest contribution margin as possible (up to the limit of its demand), followed by the next highest contribution product, and so on until no more capacity is available. Because capacity is limited, choosing the proper product mix is crucial. Troy Hendrix, the newly hired production supervisor, is an avid follower of the theory of constraints philosophy and the bottleneck method for scheduling. He believes that profitability can indeed be improved if bottleneck resources are exploited to determine the product mix. a. What is the profit if the traditional contribution margin method is used for determining CKC's product mix? The profit with the traditional approach is $3160. (Enter your response rounded to the nearest whole number.) Product A Step 1 $3 Station W (10 min) Raw materials Step 2 Station X (10 min) Step 3 Station Y (15 min) Product: A Price: $55/unit Demand: 80 units/wk Purchased party Product B $6 Step 1 Station X (20 min) Raw materials Step 2 Station W (10 min) Step 3 Station Y (11 min) Product: B Price: $70/unit Demand: 85 units/wk $10 Purchased party The senior management is concerned with the existing capacity limitation, so they want to accept the mix of orders that maximizes the company's profit. Traditionally, CKC has utilized a method whereby decisions are made to produce as much of the product with the highest contribution margin as possible (up to the limit of its demand), followed by the next highest contribution product, and so on until no more capacity is available. Because capacity is limited, choosing the proper product mix is crucial. Troy Hendrix, the newly hired production supervisor, is an avid follower of the theory of constraints philosophy and the bottleneck method for scheduling. He believes that profitability can indeed be improved if bottleneck resources are exploited to determine the product mix. a. What is the profit if the traditional contribution margin method is used for determining CKC's product mix? The profit with the traditional approach is $3160. (Enter your response rounded to the nearest whole number.)
