Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

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

image text in transcribedimage text in transcribedimage text in transcribedimage text in transcribedimage text in transcribedimage text in transcribed

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. Requirement 1. Which model should Sienna's emphasize? First, calculate the total contribution margin at full capacity for each model. Select the labels and calculate the contribution margin at capacity for the standard model, then the deluxe model. Less: Contribution margin per pair Contribution margin per machine hour Capacity- Total contribution margin at full capacity Standard Deluxe 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. Which model should Sienna's emphasize? Sienna's should emphasize the 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 Buy Sunglasses Make Facilities Make Other Sunglasses Idle Products Sienna's Shades produces standard and deluxe sunglasses: BBB (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. 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 Buy Sunglasses Make Facilities Make Other Sunglasses Idle Products Net cost of obtaining sunglasses What is the best course of action? 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. 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. Data table - X Standard Deluxe ect the labels and calculate the Sales price per pair 18 $ 28 Variable expenses per pair 12 22 Print Done Capacity- Total contribution margin at full capacity

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

Managerial Accounting Tools for business decision making

Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso

6th Edition

978-0470477144, 1118096894, 9781118214657, 470477148, 111821465X, 978-1118096895

More Books

Students also viewed these Accounting questions