Bento Inc. produces two products: Bento 350 and Benzo 230. The machines available can only work...
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Bento Inc. produces two products: Bento 350 and Benzo 230. The machines available can only work on one product at a time. The two products are produced in two departments using different grades of labour. The labour requirements for the two products are as follows: Department 1 Department 2 Minutes per unit Bento 350 Benzo 230 Selling price Direct materials Direct labour Variable overheads Fixed overheads Profit per unit 24 40 32 30 Labour hours is considered the limiting factor and the maximum times available each day in Departments 1 and 2 are 960 minutes and 1,680 minutes, respectively. The current unit selling prices and costs for the two products are shown below: Bento 350 Benzo 230 $100.00 $20.00 $20.80 $12.80 $25.60 $20.80 $130.00 $ 30.00 $12.40 $18.40 $36.80 $32.40 As part of the budget-setting process, Bento Inc. needs to ascertain the optimum output levels. All output is sold. Required (a) Calculate the maximum number of each product that could be produced each day (in each department), and identify the limiting factor/bottleneck (the department). (2 marks) (b) Using traditional contribution analysis, calculate the number of units to be produced in the Department with the bottleneck and the contribution at this level of output. (8 marks) (c) Using a throughput approach, calculate the 'throughput-maximizing' output 'throughput contribution' at this level of output. each day, and the (6 marks) Bento Inc. produces two products: Bento 350 and Benzo 230. The machines available can only work on one product at a time. The two products are produced in two departments using different grades of labour. The labour requirements for the two products are as follows: Department 1 Department 2 Minutes per unit Bento 350 Benzo 230 Selling price Direct materials Direct labour Variable overheads Fixed overheads Profit per unit 24 40 32 30 Labour hours is considered the limiting factor and the maximum times available each day in Departments 1 and 2 are 960 minutes and 1,680 minutes, respectively. The current unit selling prices and costs for the two products are shown below: Bento 350 Benzo 230 $100.00 $20.00 $20.80 $12.80 $25.60 $20.80 $130.00 $ 30.00 $12.40 $18.40 $36.80 $32.40 As part of the budget-setting process, Bento Inc. needs to ascertain the optimum output levels. All output is sold. Required (a) Calculate the maximum number of each product that could be produced each day (in each department), and identify the limiting factor/bottleneck (the department). (2 marks) (b) Using traditional contribution analysis, calculate the number of units to be produced in the Department with the bottleneck and the contribution at this level of output. (8 marks) (c) Using a throughput approach, calculate the 'throughput-maximizing' output 'throughput contribution' at this level of output. each day, and the (6 marks)
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a To calculate the maximum number of each product that could be produced each day we need to consider the limiting factorbottleneck which is the depar... View the full answer
Related Book For
Management Accounting
ISBN: 9780730369387
4th Edition
Authors: Leslie G. Eldenburg, Albie Brooks, Judy Oliver, Gillian Vesty, Rodney Dormer, Vijaya Murthy, Nick Pawsey
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