Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Wow Chemical Canada Inc. produces three products at its plant in North San JoseAlpha, Beta, andGamma. Their selling prices and costs per barrel are as

Wow Chemical Canada Inc. produces three products at its plant in North San JoseAlpha, Beta, andGamma. Their selling prices and costs per barrel are as follows:

Alpha Beta Gamma

Selling price $ 116 $ 125 $ 160

Direct materia 32 40 38

Direct labour (@ $20 per hour) 20 30 40

Variable overhead 16 23 32 Variable selling 2 2 3 Total variable costs 70 95 113 Fixed overhead * 13.50 20.25 27 The plants total fixed costs are $1,632,000 per year (i.e., the fixed overhead of $1,215,000 plusplant-specific fixed selling and administrative costs of $417,000).

The marketing department forecasts that, next year, the plant could sell a maximum of 50,000 barrelsof each product. The plants constrained resource is direct labor hours. Practical capacity is 90,000direct-labor hours per year Determine the optimal sales mix: How many barrels of each productshould the plant produce to maximize its profit? [Show all necessary calculations.]

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

More Books

Students also viewed these Accounting questions

Question

Describe Conflict Management Styles and Group Decision Making

Answered: 1 week ago

Question

Describe your ideal working day.

Answered: 1 week ago