Question
Youngstown Glass Company manufactures three types of safety plate glass: large, medium, and small. All three products have high demand. Thus, Youngstown Glass is able
Youngstown Glass Company manufactures three types of safety plate glass: large, medium, and small. All three products have high demand. Thus, Youngstown Glass is able to sell all the safety glass that it can make. The production process includes an autoclave operation, which is a pressurized heat treatment. The autoclave is a production bottleneck. Total fixed costs are $107,000 for the company as a whole. In addition, the following information is available about the three products:
Line Item Description | Large | Medium | Small |
---|---|---|---|
Unit selling price | $179 | $215 | $183 |
Unit variable cost | (141) | (176) | (161) |
Unit contribution margin | $ 38 | $ 39 | $ 22 |
Autoclave hours per unit | 4 | 6 | 2 |
Total process hours per unit | 12 | 12 | 4 |
Budgeted units of production | 2,400 | 2,400 | 2,400 |
a. Determine the contribution margin by glass type and the total company operating income for the budgeted units of production.
Line Item Description | Large | Medium | Small | Total |
---|---|---|---|---|
Units produced | fill in the blank 1 | fill in the blank 2 | fill in the blank 3 | |
Revenues | $fill in the blank 4 | $fill in the blank 5 | $fill in the blank 6 | $fill in the blank 7 |
Variable costs | fill in the blank 8 | fill in the blank 9 | fill in the blank 10 | fill in the blank 11 |
Contribution margin | $fill in the blank 12 | $fill in the blank 13 | $fill in the blank 14 | $fill in the blank 15 |
Fixed costs | fill in the blank 16 | |||
Operating income | $fill in the blank 17 |
b. Prepare an analysis showing which product is the most profitable per bottleneck hour. Round the "Unit contribution margin per production bottleneck hour" amounts to the nearest cent.
Line Item Description | Large | Medium | Small |
---|---|---|---|
Contribution margin | $fill in the blank 18 | $fill in the blank 19 | $fill in the blank 20 |
Autoclave hours per unit | fill in the blank 21 | fill in the blank 22 | fill in the blank 23 |
Unit contribution margin per production bottleneck hour | $fill in the blank 24 | $fill in the blank 25 | $fill in the blank 26 |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started