Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Required information Skip to question [The following information applies to the questions displayed below.] Conroy Company manufactures two productsB100 and A200. The company provided the

Required information Skip to question [The following information applies to the questions displayed below.] Conroy Company manufactures two productsB100 and A200. The company provided the following information with respect to these products: B100 A200 Estimated customer demand (in units) 2,800 2,000 Selling price per unit $ 1,200 $ 2,100 Variable expenses per unit $ 700 $ 1,200 The company has four manufacturing departmentsFabrication, Molding, Machining, and Assemble & Pack. The capacity available in each department (in hours) and the demands that one unit of each of the companys products makes on those departments is as follows: B100 (hours per unit) A200 (hours per unit) Capacity (in hours) Fabrication 1 2 4,000 Molding 2 2 6,000 Machining 2 0 5,000 Assemble & Pack 0 3 4,500 The company is trying to decide what product mix will maximize profits. Given that its fixed costs will not change regardless of the chosen mix, the company plans to identify the product mix that maximizes its total contribution margin. rev: 05_07_2020_QC_CS-210952 7. In the Excel template, navigate to the Requirement 7 tab. Assume that Conroy is considering raising the price of B100 to $1,400. The company believes that the price increase would drop maximum customer demand from 2,800 units to 2,600 units. a. If Conroy implements the price increase, which product would have the highest contribution margin per unit of its constraining resource? b. If the company decided to initiate production by maximizing the output of the product chosen in requirement 7a, then how many units of this product would it be able to produce before encountering that products constraint? c. If the company implemented the production plan in requirement 7b, then how many units of its remaining product could it produce with the capacity that is still available? d. What total contribution margin would the company earn if it followed the production plan described in requirements 7b and 7c?

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

Sound Investing, Chapter 11 - Crafty Comprehensive Income

Authors: Kate Mooney

1st Edition

0071719334, 9780071719339

More Books

Students also viewed these Accounting questions

Question

How would you describe Mark Zuckerberg as a team leader?

Answered: 1 week ago