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 $$143,000$ for the company as a whole. In addition,

the following information is available about the three products:

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

Large

Medium

Small

Total

Units produced

Revenues

Variable costs

Contribution margin

Fixed costs

Operating income

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.

Contribution margin

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.

Autoclave hours per unit

Unit contribution margin per production bottleneck hour