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Sienna's Shades produces standard and deluxe sunglasses: (Click the icon to view the information.) The company has 16,000 machine hours available. In one machine
Sienna's Shades produces standard and deluxe sunglasses: (Click the icon to view the information.) The company has 16,000 machine hours available. In one machine hour, Sienna's can produce 40 pairs of the standard model or 10 pairs of the deluxe model. Read the requirements. standard model, then the deluxe model. Sales price per pair Less Variable expenses per pair Contribution margin per pair Units produced each machine hour Contribution margin per machine hour Capacity number of machine hours Total contribution margin at full capacity Which model should Sienna's emphasize? Sienna's should emphasize the model. Standard Deluxe 18 28 Data table Standard Deluxe Sales price per pair $ 18 $ 28 Variable expenses per pair 12 22 1. Which model should Sienna's emphasize? 2. Sienna's also produces a third product: sport sunglasses. Sienna's incurs the following costs for 21,000 pairs of its sport sunglasses: Direct materials $ 42,000 Direct labor 84,000 Variable manufacturing overhead 105,000 63,000 Fixed manufacturing overhead Total manufacturing cost $ 294,000 Divided by number of pairs 21,000 $ 14 Cost per pair Another manufacturer has offered to sell similar sunglasses to Sienna's for $5 per unit, a total purchase cost of $105,000. If Sienna's outsources and leaves its plant idle, it can save $53,000 of fixed overhead costs. Or it can use the freed manufacturing facilities to make other products that will contribute $60,000 to profits. In this case, the company will not be able to avoid any fixed costs. Identify and analyze the alternatives. What is the best course of action? Sienna's Shades produces standard and deluxe sunglasses: standard model, then the deluxe model. Sales price per pair Less: Variable expenses per pair Contribution margin per pair Units produced each machine hour Contribution margin per machine hour Capacity number of machine hours Total contribution margin at full capacity Which model should Sienna's emphasize? Sienna's should emphasize the model. Standard Deluxe 18 28 Requirement 2. Sienna's also produces a third product: sport sunglasses. Review the cost and oth analyze the alternativne What is the host course of nation pro Contribution margin per machin Capacity number of machin Total contribution margin at full Which model should Sienna's er Sienna's should emphasize the standard deluxe model. Requirement 2. Sienna's also produces a third product: sport sunglasses. Review the cost and other information related to this product. Identify and analyze the alternatives. What is the best course of action? First, complete the following table. Relevant Costs: Direct materials Direct labor Variable overhead Fixed overhead Purchase cost Total cost of obtaining sunglasses Buy Sunglasses Make Facilities Make Other Sunglasses Idle Products Relevant Costs: Direct materials Direct labor Variable overhead Fixed overhead Purchase cost Total cost of obtaining sunglasses Profit from other products Net cost of obtaining sunglasses What is the best course of action? Sienna's Shades should Sunglasses Idle Products Purchase cost Total cost of obtaining su Profit from other product Net cost of obtaining sun What is the best course c Sienna's Shades should make the sunglasses. buy the sunglasses and leave the facilities idle. buy the sunglasses from the outside supplier and use the freed manufacturing facilities to make other products.
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