Question
Please show your work and/or explain how you got the answer: Abbott Sandwich Corporation is a manufacturer of 3 types of sandwiches: ham, peanut butter
Please show your work and/or explain how you got the answer:
Abbott Sandwich Corporation is a manufacturer of 3 types of sandwiches: ham, peanut butter and jelly and tuna fish.
Janitorial Salaries for manufacturing facility $4,000
Rent on Manufacturing Facility $2,000
| Ham | Peanut butter&Jelly | Tuna Sandwiches | |||
| Std.qty/sand | Std.pric/lb | Std.qty/sand | Std.pric/lb | Std.qty/sand | Std.pric/lb |
Direct Materials | .2lbs/sand | $4/lb | .2lbs/sand | $3/lb | .2lbs/sand | $5/lb |
Direct materials-bread | 2slices/sand | $.10/slice | 2slices/sand | $.10/slice | 2slices/sand | $.10/slice |
Direct Labor | .1 dlh/sand | $10/dlh | .2dlh/sand | $20/dlh | .2dlh/sand | $15/dlh |
VOH utilities | .1mh/sand | $5/mh | .4mh/sand | $5/mh | .2mh/sand | $5/mh |
FOH janitor | .1mh/sand | $8/mh | .4mh/sand | $8/mh | .2mh/sand | $8/mh |
FOH-rent | .1 dlh/sand | $10/dlh | .2dlh/sand | $10/dlh | .2dlh/sand | $10/dlh |
Price/sandwich | $10/sand |
| $15/sand |
| $6/sand. |
|
Annual Demand | 4000 |
| 5000 |
| 6000 |
|
- Compute the CONTRIBUTION margin in terms of total $s for all 3products;
- Abbott is thinking about discontinuing the Tuna Sandwich product line. If it does so, it will reduce the janitorial salaries by $1,000. Should Abbott discontinue the Tuna sandwiches line? Why or why not?
- Abbott is thinking about outsourcing the Ham sandwiches to Fischer corporation for $3/sandwich. If it does so, it can reduce janitorial expenses by $3,000. Should Abbott outsource? Why or why not?
- Assume that the toaster/machine can only run a total of 1100 hours or it will break. How many of each sandwich should abbott make? Show your work.
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