Product Decisions Under Bottlenecked Operations Youngstown Glass Company manufactures three types of safety plate glass: large, medium,
Question:
Product Decisions Under Bottlenecked Operations Youngstown Glass Company manufactures three types of safety plate glass: large, medium, and small. All three products have high demand. Thus, Youngstown 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 $228,000 for the company as a whole. In addition, the following information is available about the three products: Large Medium Small Unit selling price $197 $149 $324 Unit variable cost (155) (122) (285) Unit contribution margin $ 42 $ 27 $ 39 Autoclave hours per unit 4 2 6 Total process hours per unit 8 4 18 Budgeted units of production 4,700 4,700 4,700
Determine the contribution margin by glass type and the total company operating income for the budgeted units of production
