Ryan Corporation manufacturers four products; A. B. C. D. Sales Price per unit:
ID: 2489019 • Letter: R
Question
Ryan Corporation manufacturers four products;
A. B. C. D.
Sales Price per unit: $300 $250 $350 $500
Variable Cost per unit: 170 130 210 330
Machine Hrs. per unit: 5 3 4 6
Periodic Demand in un: 300 500 800 250
If Ryan corporation has a monthly manufacturing capacity of 5,431 machine hours per period, how many units of each product should Ryan produce in order to maximize operations efficiency?
Show all work please.
Explanation / Answer
Product A B C D Sales price 300 250 350 500 Less Variable cost 170 130 210 330 Contribution per unit 130 120 140 170 Machine hours per unit 5 3 4 6 contribution per machine hour 26 40 35 28.33333 Highest contribution from B C Contribution per machine hour 40 35 Machine hours per unit 3 4 Periodic demand per unit 500 800 Machine hours required 1500 3200 4700 Total machine hours avaialble 5431 Machine hours used in B 1500 C 3200 Balance hours available 731 After prifducing maximum units of B and C , Product D should be produced from balance hours available Balance hours availabe 731 Machine hours required per unit of D 6 Number of units produced 121.8333 Number of units produced ( rounded off) 122 Hence number of units produced B 800 C 500 D 122
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