Question
Required Information (The following information applies to the questions displayed below.) Conroy Company manufactures two products-8100 and A200. The company provided the following information
Required Information (The following information applies to the questions displayed below.) Conroy Company manufactures two products-8100 and A200. The company provided the following information with respect to these products: $100 A200 Estimated customer demand (in units) Selling price per unit 2,800 $1,200 2,000 Variable expenses per unit $ 700 $2,100 $1,200 The company has four manufacturing departments-Fabrication, Molding, Machining, and Assemble & Pack. The capacity available in each department (in hours) and the demands that one unit of each of the company's products makes on those departments is as follows: 8100 A200 (hours per unit) (hours per unit) Capacity Fabrication Molding Machining Assemble & Pack 1 2 2 0 2 2 0 3 (in hours) 4,000 6,000 5,000 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. Click here to download the Excel template, which you will use to answer the questions that follow Click here for a brief tutorial on SOLVER in Excel Click here for a a brief tutorial on Charts in Excel Required: 1. Refer to the "Requirements 1-3" tab in your Excel spreadsheet. Assume the company focuses solely on producing B100: a. Which department would be the constraint? (Hint: Create formulas in cells J7 through J10 that calculate B100's maximum output in each department.) b. What is 8100's contribution margin per hour of the constraining resource that you identified in requirement 1a? (Hint: Input a formula in cell B11 that translates B100's contribution margin per unit in cell B10 to its contribution margin per hour of the constraining resource.)
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