Question
In: Accounting
A manufacturer sells two types of products. Product 1 is sold at a price of $50...
A manufacturer sells two types of products. Product 1 is sold at a price of $50 per unit and product 2 at a price of $60 per unit. Three units of raw material and 1.5 labor hours are needed to manufacturer one unit of product 1. Six units of raw material and 2 labor hours are need to manufacture one unit of product 2. The unit variable cost for product 1 is $30, and for product 2 is $20. A total of 15,000 units of raw material and 10,000 labor hours are available. If any product 1 is produced, a setup cost of $20,000 is incurred; if any product 2 is produced, a setup cost of $35,000 is incurred. Determine how to maximize the manufacturer’s profit.
a) What is the effective capacity for product 1 and product 2, respectively?
b) In the optimal solution, which product(s) will be manufactured? What is the optimal production quantity? What is the optimal profit?
Solutions
ekkarill92 answered 3 weeks agoRelated Solutions
A manufacturer sells two types of products. Product 1 is sold at a price of $50...
A manufacturer sells two types of products. Product 1 is sold at
a price of $50 per unit and product 2 at a price of $60 per unit.
Three units of raw material and 1.5 labor hours are needed to
manufacture one unit of product 1. Six units of raw material and 2
labor hours are needed to manufacture one unit of product 2. The
unit variable cost for product 1 is $30, and for product 2 is $20.
A...
A company sells two products, A and B. Product A Product B Produced and sold 8.000...
A company sells two products, A and B.
Product A
Product B
Produced and sold
8.000 units
16.000 units
Sale price per unit
65
52
Variable cost per unit
35
30
Fixed cost per unit
15
15
Fixed cost is divided in a traditional way, based on the
produced quantity.
The company started to design a new product C to replace product
B. The company could sell 11.000 units of product C with a selling
price of 80 per unit....
A firm sells a product in a perfectly competitive market, at a price of $50. The...
A firm sells a product in a perfectly competitive market, at a
price of $50. The firm has a fixed cost of $30. Fill in the
following table and indicate the level of output that maximizes
profit. How would the profit-maximizing choice of output change if
the fixed cost increased from $40 to $60? More generally, explain
how the level of fixed cost affects the choice of output
Output
Total Revenue
Total Cost
Profit
Marginal Revenue
Marginal Cost
0
1...
Norman Berhad sells two products; product X and product Y. The information about sales price, variable...
Norman Berhad sells two products; product X and product Y. The
information about sales price, variable expenses and total fixed
expenses is given below:
Product X
Product Y
Selling price per unit
RM50
RM100
Variable expenses per unit
RM30
RM40
The total monthly fixed expenses of the company are RM 270,000.
Norman Berhad wants to generate a sales revenue of RM 1,000,000 in
the next month. To obtain this goal the company has the following
options:
Option 1: Sell 6,000...
Quiz 4 A manufacturer makes and sales four types of products: Product X, Product Y, Product Z,...
Quiz 4
A manufacturer makes and sales four types of
products: Product X, Product Y, Product Z, and Product
W.
The resources needed to produce one unit of each product and the
sales prices are given in the following Table.
Resource
Product X
Product Y
Product Z
Product W
Steel (lbs)
2
3
4
7
Hours of Machine Time (hours)
3
4
5
6
Sales Price ($)
4
6
7
8
Currently, 4,600 pounds of steel and 5,000 machine hours are...
Quiz 4 A manufacturer makes and sales four types of products: Product X, Product Y, Product Z,...
Quiz 4
A manufacturer makes and sales four types of
products: Product X, Product Y, Product Z, and Product
W.
The resources needed to produce one unit of each product and the
sales prices are given in the following Table.
Resource
Product X
Product Y
Product Z
Product W
Steel (lbs)
2
3
4
7
Hours of Machine Time (hours)
3
4
5
6
Sales Price ($)
4
6
7
8
Currently, 4,600 pounds of steel and 5,000 machine hours are...
Quiz 4 A manufacturer makes and sales four types of products: Product X, Product Y, Product Z,...
Quiz 4
A manufacturer makes and sales four types of
products: Product X, Product Y, Product Z, and Product
W.
The resources needed to produce one unit of each product and the
sales prices are given in the following Table.
Resource
Product X
Product Y
Product Z
Product W
Steel (lbs)
2
3
4
7
Hours of Machine Time (hours)
3
4
5
6
Sales Price ($)
4
6
7
8
Currently, 4,600 pounds of steel and 5,000 machine hours are...
Required 1. Olmo, Inc., manufactures and sells two products: Product K0 and Product H9. The annual...
Required 1. Olmo,
Inc., manufactures and sells two products: Product K0 and Product
H9. The annual production and sales of Product of K0 is 700 units
and of Product H9 is 700 units. The company has an activity-based
costing system with the following activity cost pools, activity
measures, and expected activity:
Activity Cost Pools
Activity Measures
Estimated Overhead
Cost
Expected Activity
Product
K0
Product
H9
Total
Labor-related
DLHs
$
549,308
5,600
2,800
8,400
Production
orders
orders
52,319
800
400
1,200...
A & B manufactures and sells two types of products to a number of customers. The...
A & B manufactures and sells two types of products to a
number of customers. The resources are as follows:
Material Type
Product X
Product Y
Available
Material P
8
10
31,250
Material Q
10
5
20,000
Direct Labour
4
5
17,500
Maximum sales(demand) for X is 1000 units and Y 3000
units.Contribution margin X $96 and Y $110
Formulate a linear programme
Solve in excel
Write a brief report to explain the analysis
Twin Products Company produces and sells two products. Product M sells for $12 and has variable...
Twin Products Company produces and sells two products. Product M
sells for $12 and has variable costs of $6. Product W sells for $15
and has variable costs of $10. Twin predicted sales of 25,000 units
of M and 20,000 of W. Fixed costs are $60,000 per month. Assume
that Twin achieved its sales goal of $600,000 for September, but
fell short of its expected operating income of $190,000. Which of
the following descriptions best describes the actual results
reported...
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