Tilted Towers welcomes many of its guests by airdrop. Patrons use either custom glide suits or...

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Tilted Towers welcomes many of its guests by airdrop. Patrons use either custom glide suits or personal hang-gliders for their arrivals. Because påtrons often leave suddenly and abandon their arrival gear, creating high turnover and a ready market, Tilted Towers has decided to manufacture and sell custom landing equipment to future customers. It plans to manufacture both personal hang-gliders (HGs) and glide suits (GSs). Each HG requires $300 of materials and 4 labor hours, while each GS requires $200 of materials and 5 labor hours. Tilted Towers has a total of $60,000 budgeted for materials for the current production cycle, and 1,000 labor hours available for the same production cycle. The HG has a unit contribution margin of $500 and the GS has a unit contribution margin of $600. If labor hours are the constrained resource, then which of its products should be the focus of Tilted Towers production and sales efforts? Demonstrate your calculations that allowed you to make this determination. Would the answer be the same if the materials are the constrained resource? Show the calculations that enabled you to make this determination. Tilted Towers welcomes many of its guests by airdrop. Patrons use either custom glide suits or personal hang-gliders for their arrivals. Because påtrons often leave suddenly and abandon their arrival gear, creating high turnover and a ready market, Tilted Towers has decided to manufacture and sell custom landing equipment to future customers. It plans to manufacture both personal hang-gliders (HGs) and glide suits (GSs). Each HG requires $300 of materials and 4 labor hours, while each GS requires $200 of materials and 5 labor hours. Tilted Towers has a total of $60,000 budgeted for materials for the current production cycle, and 1,000 labor hours available for the same production cycle. The HG has a unit contribution margin of $500 and the GS has a unit contribution margin of $600. If labor hours are the constrained resource, then which of its products should be the focus of Tilted Towers production and sales efforts? Demonstrate your calculations that allowed you to make this determination. Would the answer be the same if the materials are the constrained resource? Show the calculations that enabled you to make this determination.

Answer rating: 100% (QA)

To determine which product should be the focus if labor hours are the constrained resource we need to calculate the contribution margin per labor hour ... View the full answer