Sullivan Precision Tools makes cutting tools for metalworking operations. It makes two types of tools: A6, a regular cutting tool, and EX4, a high-precision cutting tool. Ab is manufactured on a regular machine, but EX4 must be manufactured on both the regular machine and a high-precision machine. The following information is available: E (Click to view the information.) Read the requirements. Sinn Requirement 2. Suppose Sullivan can increase the annual capacity of its regular machines by 16,000 machine-hours at a cost of $80,000. Should Sullivan increase the capacity of the regular machines by 16,000 machine hours? By how much will Sullivan's operating income increase or decrease? Show your calculations. Begin by calculating the benefit from only selling A6 or EX4 with the increased capacity of the regular machine. (Enter an amount in each input cell including zero balances.) A6 EX4 Contribution margin per unit x Hours of constrained resource Total contribution margin Less: Cost of increasing capacity Net relevant benefit Should Sullivan increase the capacity of the regular machines by 16,000 machine hours? By how much will Sullivan's operating income increase? increase the capacity of the regular machine by 16,000 machine hours. Sullivan's operating Sullivan should income will increase by $ Sullivan Precision Tools makes cutting tools for metalworking operations. It makes two types of tools: A6, a regular cutting tool, and EX4, a high-precision cutting tool. A6 is manufactured on a regular machine, but EX4 must be manufactured on both the regular machine and a high-precision machine. The following information is available: E: (Click to view the information.) Read the requirements. Requirement 3. Suppose that the capacity of the regular machines has been increased to 66,000 hours. Sullivan has been approached by Delaney Corporation to supply 24,000 units of another cutting tool, V2, for $173 per unit. Sullivan must either accept the order for all 24.000 units or reject it totally. V2 is exactly like Ab except that its variable manufacturing cost is $60 per unit. (It takes one hour to produce one unit of V2 on the regular machine, and variable marketing cost equals $12 per unit.) What product mix should Sullivan choose to maximize operating income? Show your calculations. First, determine the amount that should be used to determine if Sullivan should accept Delaney's order. A6 EX4 V2 Contribution margin per unit Sullivan accept Delaney's order. Next, determine the product mix for A6 and EX4 that will maximize operating income along with the decision you made about Delaney's order. (Enter an amount in each input cell including zero balances.) EX4 Contribution margin per unit x Hours of constrained resource Total contribution margin Less: Not relevant hanefit What product mix should Sullivan choose to maximize operating income? (Enter an amount in each input cell, including zero balances.) u nits of V2, L Based on the above calculations, the product mix that maximizes operating income is L units of A6, and units of EX4. Choorfromanu liet ar antara umobor in the nut field and then continue to the nortation Sullivan Precision Tools makes cutting tools for metalworking operations. It makes two types of tools: A6, a regular cutting tool, and EX4, a high-precision cutting tool. Ab is manufactured on a regular machine, but EX4 must be manufactured on both the regular machine and a high-precision machine. The following information is available: E (Click to view the information.) Read the requirements. Sinn Requirement 2. Suppose Sullivan can increase the annual capacity of its regular machines by 16,000 machine-hours at a cost of $80,000. Should Sullivan increase the capacity of the regular machines by 16,000 machine hours? By how much will Sullivan's operating income increase or decrease? Show your calculations. Begin by calculating the benefit from only selling A6 or EX4 with the increased capacity of the regular machine. (Enter an amount in each input cell including zero balances.) A6 EX4 Contribution margin per unit x Hours of constrained resource Total contribution margin Less: Cost of increasing capacity Net relevant benefit Should Sullivan increase the capacity of the regular machines by 16,000 machine hours? By how much will Sullivan's operating income increase? increase the capacity of the regular machine by 16,000 machine hours. Sullivan's operating Sullivan should income will increase by $ Sullivan Precision Tools makes cutting tools for metalworking operations. It makes two types of tools: A6, a regular cutting tool, and EX4, a high-precision cutting tool. A6 is manufactured on a regular machine, but EX4 must be manufactured on both the regular machine and a high-precision machine. The following information is available: E: (Click to view the information.) Read the requirements. Requirement 3. Suppose that the capacity of the regular machines has been increased to 66,000 hours. Sullivan has been approached by Delaney Corporation to supply 24,000 units of another cutting tool, V2, for $173 per unit. Sullivan must either accept the order for all 24.000 units or reject it totally. V2 is exactly like Ab except that its variable manufacturing cost is $60 per unit. (It takes one hour to produce one unit of V2 on the regular machine, and variable marketing cost equals $12 per unit.) What product mix should Sullivan choose to maximize operating income? Show your calculations. First, determine the amount that should be used to determine if Sullivan should accept Delaney's order. A6 EX4 V2 Contribution margin per unit Sullivan accept Delaney's order. Next, determine the product mix for A6 and EX4 that will maximize operating income along with the decision you made about Delaney's order. (Enter an amount in each input cell including zero balances.) EX4 Contribution margin per unit x Hours of constrained resource Total contribution margin Less: Not relevant hanefit What product mix should Sullivan choose to maximize operating income? (Enter an amount in each input cell, including zero balances.) u nits of V2, L Based on the above calculations, the product mix that maximizes operating income is L units of A6, and units of EX4. Choorfromanu liet ar antara umobor in the nut field and then continue to the nortation
