Q4. Gallery Corporation makes two products, footballs and baseballs. Additional information follows: Footballs Baseballs Demand (Units)...

Q4. Gallery Corporation makes two products, footballs and baseballs. Additional information follows: Footballs Baseballs Demand (Units) 2,000 3,000 Selling price per unit $30 $8 Total variable costs per unit $ 12 $ 4 Fixed costs 10,000 5,250 Yards of leather per unit 1.25 0.25 Direct labor hours required per unit 0.75 1.0 Assume that Gallery is able to purchase only 2,500 yards of leather and wishes to maximize its income. Total labor hours available for production is 4,600 hours. Required: a. Identify the limiting factor. (Marks 02) b. What will be the sales at which Gallety Corp will be at maximum profit by considering limiting factor. (Marks 08)

Expert Solution

ekkarill92 answered 2 years ago

Gallery Corporation makes two products, footballs and baseballs. Additional information follows: &

Gallery Corporation makes two products, footballs and baseballs. Additional information follows: Footballs Baseballs Demand (Units) 2,000 3,000 Selling price per unit $30 $8 Total variable costs per unit $ 12 $ 4 Fixed costs 10,000 5,250 Yards of leather per unit 1.25 0.25 Direct labor hours required per unit 0.75 1.0 Assume that Gallery is able to purchase only 2,500 yards of leather and wishes to maximize its income. Total labor hours available for production is...

A company sells two products. Information about two products is as follows: Product A: Sales Units-1200...

A company sells two products. Information about two products is as follows: Product A: Sales Units-1200 Selling price per unit-$20 variable costs per unit 11 Product B: Sales unit- 800 Selling price per unit- $25 Variable costs per unit- 18 If fixed costs are expected to be $12,300, what is the margin of safety?

The Red Company makes two products. Cost data for these two products is as follows: Product...

The Red Company makes two products. Cost data for these two products is as follows: Product A Product B Selling price $10 $20 Variable costs 7 12 Total annual fixed costs are $840,000. The firm's experience has been that about 20 percent of unit sales come from product A, 80 percent from B. The Red Company is taxed at 30% Required: a. Determine the number of units to be sold at the break-even point. b. Determine the number of units...

[The following information applies to the questions displayed below.] Performance Products Corporation makes two products, titanium...

[The following information applies to the questions displayed below.] Performance Products Corporation makes two products, titanium Rims and Posts. Data regarding the two products follow: Direct Labor-Hours per unit Annual Production Rims 0.70 26,000 units Posts 0.80 90,000 units Additional information about the company follows: a. Rims require $14 in direct materials per unit, and Posts require $10. b. The direct labor wage rate is $20 per hour. c. Rims are more complex to...

Perfect Corporation manufactures four products; information regarding those products is as follows:

Perfect Corporation manufactures four products; information regarding those products is as follows: A B C D Sales Price per Unit $300 $250 $350 $500 Variable Cost per Unit $170 $130 $ 210 $330 Machine Hours per Unit 5 3 4 6 Periodic Demand in Units 300 500 800 250 Answer the following: (A) If Perfect Corporation has a monthly capacity of 5,431 machine hours per period, how many units of each product should Perfect Reb produce in order to maximize...

Data on the two products are as follows : Alpha BETA Sales in volume in units...

Data on the two products are as follows : Alpha BETA Sales in volume in units 520 420 units sale price $300 $400 units variable cost 200 240 units contribution margin $100 $160 Total fixed costs for the manufacture of both products are $100,000. Assuming that sales mix in terms of unit remains constant, what is the breakeven point in total revenue dollars?

Jonah Hill Company manufactures two products. Information about the two products is as follows: Product...

Jonah Hill Company manufactures two products. Information about the two products is as follows: Product X Product Y Selling price per unit $80 $30 Variable costs per unit 40 20 Contribution margin per unit $40 $10 The company expects fixed costs to be $185,000. The firm expects 70% of its sales (in units) to be Product X and 30% to be Product Y (a sales mix of 7:3). a. Calculate the weighted average contribution margin or contribution margin by...

Waterway is an electronics components manufacturer. Information about the company’s two products follows: AM-2 FM-9 Units...

Waterway is an electronics components manufacturer. Information about the company’s two products follows: AM-2 FM-9 Units produced 20,000 4,000 Direct labor hours required for production 10,000 15,000 Units per batch 4,000 400 Shipping weight per unit 0.50 lbs. 10 lbs. The company incurs $814,000 in overhead per year and has traditionally applied overhead on the basis of direct labor hours. (a) Correct answer iconYour answer is correct. (i) How much overhead will be allocated to each product using the traditional...

Sunland is an electronics components manufacturer. Information about the company’s two products follows: AM-2 FM-9 Units...

Sunland is an electronics components manufacturer. Information about the company’s two products follows: AM-2 FM-9 Units produced 25,000 5,000 Direct labor hours required for production 12,500 15,000 Units per batch 5,000 500 Shipping weight per unit 0.50 lbs. 10 lbs. The company incurs $899,250 in overhead per year and has traditionally applied overhead on the basis of direct labor hours. Assume that Sunland has identified three activity cost pools. Pool Cost Cost Driver Assembly $577,500 Direct labor hours Setup 40,500...

A company makes two products, the variable costs are as follows; Product A Product B £...

A company makes two products, the variable costs are as follows; Product A Product B £ £ Direct materials 1 3 Direct labour (£6 per hour) 6 3 Variable overhead 1 1 8 7 The sale price of A is £14 and B is £11. During the month of July the availability of Direct Labour is limited to 5000 hours due to staff taking holidays. Sales demand is expected to be 3000 units of A and 5000 units of B....

Question