Car Art makes miniature reproductions of classic sports cars The
Car Art makes miniature reproductions of classic sports cars. The bottleneck in the production process is the requirement to apply several coats of paint to each car. This process requires the attention of the shop’s most experienced craftsperson. A total of 7,200 hours is available per year in this bottleneck operation. Data concerning the company’s four products appear below:
No fixed costs could be avoided by modifying how many units are produced of any product or even by dropping any one of the products.
1. Is there sufficient capacity in the bottleneck operation to satisfy demand for all products?
2. What is the optimal production plan for the year?
3. What would be the total contribution margin for the optimal production plan you have proposed?
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