Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Power Corp. makes 2 products: blades for table saws and blades for handsaws. Each product passes through the sharpening machine area, which is the chief

Power Corp. makes 2 products: blades for table saws and blades for handsaws. Each product passes through the sharpening machine area, which is the chief constraint during production. Handsaw blades take 15 minutes on the sharpening machine and have a contribution margin per blade of $15. Table saw blades take 20 minutes on the sharpening machine and have a contribution margin per blade of $35.

PLEASE NOTE: All dollar amounts are rounded to whole dollars and shown with "$" and commas as needed (i.e. $12,345). For units of blades for table saws and hand saws, use commas as needed (i.e. 1,234).

Part A: If it is assumed that Power Corp. has 5,000 hours available on the sharpening machine to service a minimum demand for each product of 4,000 units, how much will profit increase if 200 more hours of machine time can be obtained?[HINT - You should convert the hours to minutes.]

  1. What is the contribution margin per the constrained resource for table saw blades? .
  2. What is the contribution margin per the constrained resource for handsaw blades? .
  3. Given the answers to the first two questions, which product gets all of the additional 200 hours? . Please note: Your answer is either "Table Saw Blades" or "Handsaw Blades" - capital first letters and no quotes.
  4. How much will profit increase if 200 more hours of machine time can be obtained?

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_2

Step: 3

blur-text-image_3

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

Financial Accounting Fundamentals

Authors: John Wild

4th Edition

0078025591, 9780078025594

More Books

Students also viewed these Accounting questions

Question

600 lb 20 0.5 ft 30 30 5 ft

Answered: 1 week ago

Question

A greater tendency to create winwin situations.

Answered: 1 week ago

Question

Improving creative problem-solving ability.

Answered: 1 week ago