Product Decisions Under Bottlenecked Operations, Pennsylvania Glass Company manufactures three types of safety plate glass
Product Decisions Under Bottlenecked Operations, Pennsylvania Glass Company manufactures three types of safety plate glass
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Product Decisions Under Bottlenecked Operations
Pennsylvania Glass Company manufactures three types of safety plate glass: large, medium, and small. All three products have high demand. Thus, Pennsylvania 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 $264,000 for the company as a whole. In addition, the following information is available about the three products:
|
Large
|
Medium
|
Small
|
|
Unit selling price
|
$324
|
$110
|
$448
|
|
Unit variable cost
|
255
|
90
|
394
|
|
Unit contribution margin
|
$ 69
|
$ 20
|
$ 54
|
|
Autoclave hours per unit
|
6
|
2
|
4
|
|
Total process hours per unit
|
18
|
4
|
8
|
|
Budgeted units of production
|
4,100
|
4,100
|
4,100
|
- Determine the contribution margin by glass type and the total company income from operations for the budgeted units of production.
|
Large
|
Medium
|
Small
|
Total
|
|
Units produced
|
|
Revenues
|
$4,100
|
$4,100
|
$4,100
|
$
|
|
Less: Variable costs
|
|
Contribution margin
|
$
|
$
|
$
|
$
|
|
Less: Fixed costs
|
$264,000
|
|
Income from operations
|
$
|
- 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.
|
Large
|
Medium
|
Small
|
|
Contribution margin
|
$
|
$
|
$
|
|
Autoclave hours per unit
|
|
Unit contribution margin per production bottleneck hour
|
$
|
$
|
$
|
So far this is what ive got right.. please help. Showing all work is appreciated.
Product Decisions Under Bottlenecked Operations
Pennsylvania Glass Company manufactures three types of safety plate glass: large, medium, and small. All three products have high demand. Thus, Pennsylvania Glass is able to sell all the safety glass t
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