Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Product Decisions Under Bottlenecked Operations Youngstown Glass Company manufactures three types of safety plate glass: large, medium, and small. All three products have high demand.

Product Decisions Under Bottlenecked Operations

Youngstown Glass Company manufactures three types of safety plate glass: large, medium, and small. All three products have high demand. Thus, Youngstown Glass is able to sell all the safety glass that it can make. The production process includes an autoclave operation, which is a pressurized heat treatment. The autoclave is a production bottleneck. Total fixed costs are $266,000 for the company as a whole. In addition, the following information is available about the three products:

Large Medium Small
Unit selling price $179 $121 $548
Unit variable cost 141 99 482
Unit contribution margin $ 38 $ 22 $ 66
Autoclave hours per unit 4 2 6
Total process hours per unit 12 4 12
Budgeted units of production 4,700 4,700 4,700

a. Determine the contribution margin by glass type and the total company income from operations for the budgeted units of production.

image text in transcribed

Medium Total Large Small Units produced Revenues Variable costs Contribution margin Fixed costs Income from operations b. Prepare an analysis showing which product is the most profitable per bottleneck hour. Round the "Unit contribution margin per production bottleneck hour" amounts to the nearest cent. Medium Small Large Contribution margin Autoclave hours per unit Unit contribution margin per production bottleneck hour

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

Auditing Information Systems A Comprehensive Reference Guide

Authors: Jack J. Champlain

1st Edition

0471168904, 978-0471168904

More Books

Students also viewed these Accounting questions