1. Scarce Resource Constraint Crest information Technologies manufactures three
ID: 2583165 • Letter: 1
Question
1. Scarce Resource Constraint Crest information Technologies manufactures three sizes of copiers: Light, Medium, and Heavy. Demand for the three copiers is as follows: 200 units of Light, 240 units of Medium, and 200 units of Heavy. Crest has 12,000 machine hours available. Product information is provided below: Light Medium Heavy Selling Price per unit Variable Manufacturing Costs per unit Machine Hours per Unit $300 $180 20 $500 1,000 $460 100 $300 40 Fixed manufacturing costs total $60,000. REQUIRED: Determine how many units of each product should be produced and what the total contribution margin associated with your solution is.Explanation / Answer
Answer:-
8000 (Balancing Figure)
Total units produced of Light copiers =200 units
Total units produced of Heavy copiers=80 units
Medium copiers should not produced because all the machine hours (ie-12000 hours) are exhaust upto 2nd ranking and total resultant contribution is $67200.
Statement of Ranking Products Light Medium Heavy $ $ $ Selling Price per Unit 300 500 1000 Less:- Variable Manufaturing cost per unit 180 300 460 Contribution per unit 120 200 540 Machine hours per unit 20 40 100 Contribution per machine hour 6 5 5.4 Ranking 1 3 2Related Questions
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