Question: 1. Should there be additional overtime, and if so, how much? 2. Should additional laminate be purchased, and if so, how much? 3. Should additional
2. Should additional laminate be purchased, and if so, how much?
3. Should additional wood be purchased, and if so, how much?
4. What is the maximum profit that can be achieved by purchasing additional wood?
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Custom Cabinets, Inc. (CCI), manufactures two major lines of kitchen and bathroom cabinets. The SemiCustom Line consists of cabinets that are variations on a standard design. These cabinets are made to order. The StandardLine is a lower-priced line of cabinets that use standardized designs and materials. StandardLine cabinets are made to stock. The company has been in business for many years and has consistently performed well financially. It was obvious that something big was up as the management staff began to gather for a meeting called by CCI General Manager John Fleming. There was little of the usual light banter, and more significantly, there were no coffee and donuts. The CCI culture celebrates even small achievements with coffee and donuts. Their absence was not a goodomen.
ENCLOSURE A BILLS OF MATERIALS AND LABOR Solid ENCLOSURE B ORDERS AND PROFITS Assbly. Finish Build-to-Stock Wood Trim Granite Surface Laminate Labor Labor bd.-ft. lin. ft. sq.ft. sq. ft. sq, ft .hrs. hrs Profit/Unit Customer Orders Authorization Next Month @ Standard Next Month SemiCustom Line SemiCustom Line SC-A 125 SC-B 160 SC-C 140 SC-D 200 StandardLine S-10 60 S-20 110 S-30 200 S-40 180 27 175 42 243 35 0 160 52 0 37 57 30 35 SC-A SC-B SC-C SC-D $325 $575 $257 $275 12 92 130 150 140 StandardLine 21 0 28 0 50 0 43 0 112 21 25 30 27 S-10 S-20 S-30 S-40 475 363 510 412 400 135 254 176 $210 $260 $230 475 Available Source: OVictor E. Sower 2006 400,000 140,000 45,000 150,000 400,000 100,000 25,000
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