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Question 2: Toys R us produces car toys in two processes: modelling and assembly. It is currently producing two models: BMW toy and Mazda toy.
Question 2: Toys R us produces car toys in two processes: modelling and assembly. It is currently producing two models: BMW toy and Mazda toy. Production in the modelling department is limited by the amount of materials available. Production in the assembly department is limited by the amount of trained labor available. The only variable costs are materials in the modelling department and labor in the assembly department. Following are related information: Modeling Assembly Selling price materials time BMW toy 2 pounds per 15 minutes $39 per doll doll per doll Mazda toy 3 pounds per 20 minutes $50 per doll doll per doll Materials/ 36,000 8,500 hours labor available pounds Cost $8 per pound $12 per hour Required: (each is an independent case) A. If there were enough demand for either toy, what would Toys R us production mix be? And what would the company's contribution margin be based on this production mix? (solve this question using the table) B. If the maximum demand for each product was 9,000 units, and Toys R us had a policy to at least produce 3,000 units of each product, what would Toys Rus' production mix be? And what would the company's contribution margin be based on this production mix? (answer this question using the table)
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