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Spoonfuls, Inc. manufactures three spoon products made from recycled wood: A soup spoon, a small wooden sampler spoon and a tall drink spoon. Demand for
Spoonfuls, Inc. manufactures three spoon products made from recycled wood: A soup spoon, a small wooden sampler spoon and a tall drink spoon. Demand for all three products is robust.
Average weekly demand for their products is listed below. Spoons are sold in packs of The data below are for spoon packs, not individual spoons.
Spoonfuls operates specialty wood cuttingsanding lathes to manufacture these three products. Because of the wear and tear and saw dust created by their extensive use, at least lathes are being repaired or being cleaned during most production weeks and therefore, unavailable for use.
Silvia Spooner, Spoonfuls controller and daughter of the founder, is focused on operating profit. She worries that continued lathe downtime is severely lowering weekly profit. She would like to develop a production plan which maximizes weekly operating profit when there are insufficient lathe manufacturing hours to produce that week's demand.
She has collected the following average weekly demand, product costs and lathe production times needed to make a pack of each spoontype. Lathes run, on average, hours per week.
Assuming there are only lathes available during next week's production, what spoontype and how many packs should be made first, second, and then third to maximize operating profit at this reduced level of capacity?
Sampler Spoon Soup Spoon Tall Drink Spoon
Ave Weekly Demand in packs of spoons
Selling Price per pack $ $ $
Variable Cost per pack
Wood $ $ $
Labor $ $
Bag $ $ $
Utilities $ $ $
Total Variable Costs $ $ $
of Rev
Contribution Margin per pack $ $ $
of Rev
Lathe machine minutes to make pack
Group of answer choices
a # Sampler Spoon: ; # Soup Spoon: ; # Tall Drink Spoon:
b # Soup Spoon: ; # Sampler Spoon: ; # Tall Drink Spoon:
c # Tall Drink Spoon: ; # Sampler Spoon: ; # Soup Spoon:
d # Soup Spoon: ; # Tall Drink Spoon: ; # Sampler Spoon:
e # Tall Drink Spoon: ; # Soup Spoon: ; # Sampler Spoon:
f There is insufficient information to compute an answer
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