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 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 $$223,000$ for the company as a whole. In addition, the following information is available about the three products:

Large Medium Small

Unit selling price $$80$ $$363$ $$266$

Unit variable cost $63297234$

Unit contribution margin $ $17$ $$66$ $$32$

Autoclave hours per unit $264$

Total process hours per unit $6188$

Budgeted units of production $4,3004,3004,300$

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

Large Medium Small Total

Units produced fill in the blank $1$

fill in the blank $2$

fill in the blank $3$

Revenues $fill in the blank $4$

$fill in the blank $5$

$fill in the blank $6$

$fill in the blank $7$

Less: Variable costs fill in the blank $8$

fill in the blank $9$

fill in the blank $10$

fill in the blank $11$

Contribution margin $fill in the blank $12$

$fill in the blank $13$

$fill in the blank $14$

$fill in the blank $15$

Less: Fixed costs fill in the blank $16$

Income from operations $fill in the blank $17$

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.

Large Medium Small

Unit contribution margin $fill in the blank $18$

$fill in the blank $19$

$fill in the blank $20$

Autoclave hours per unit fill in the blank $21$

fill in the blank $22$

fill in the blank $23$

Unit contribution margin per production bottleneck hour $fill in the blank $24$

$fill in the blank $25$

$fill in the blank $26$