Question

Low Tech Toys (LTT) produces dolls in two processes: moulding and assembly. LTT is currently producing two models: Chatty Chelsey and Talking Tanya. Production in the Moulding department is limited by the amount of materials available. Production in the Assembly department is limited by the amount of trained labour available. The only variable costs are materials in the Moulding department and labour in the Assembly department. Following are the requirements and limitations by doll model and department:
REQUIRED
1. If LTT sold only one type of doll, which doll would it produce? How many of these dolls would it make and sell?
2. If LTT sells two Chatty Chelseys for each Talking Tanya, how many dolls of each type would it produce and sell? What would be the total contribution margin?
3. If LTT sells two Chatty Chelseys for each Talking Tanya, how much would production and contribution margin increase if the Moulding department could buy 10 more kilo- grams of materials for $10 per kilogram?
4. If LTT sells two Chatty Chelseys for each Talking Tanya, how much would production and contribution margin increase if the Assembly department could get 10 more labour- hours at $12 per hour?


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  • CreatedJuly 31, 2015
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