Blossom, Incorporated, is a small company that manufactures three versions of patio tables. Unit information for its products follows:

Table A Table B Table C

Sales price $ $54$ $ $58$ $ $72$

Direct materials $111213$

Direct labor $359$

Variable manufacturing overhead $555$

Fixed manufacturing overhead $777$

Required number of labor hours $0\mathrm{.}500\mathrm{.}501\mathrm{.}00$

Required number of machine hours $4\mathrm{.}002\mathrm{.}502\mathrm{.}00$

Blossom has determined it can sell a limited number of each table in the upcoming year. Expected demand for each model follows:

Table A $60,000$ units

Table B $20,000$ units

Table C $20,000$ units

Required:

$1.$Suppose direct labor hours have been identified as the bottleneck resource. Determine how Blossom should prioritize production by rank, i$.$e$.,$ ordering the products from $1$ to $3.$

$2.$If Blossom has only $50,000$ direct labor hours available, calculate the number of units of each table Blossom should produce to maximize its profit.

$3.$Suppose the number of machine hours has been identified as the most constrained resource. Determine how Blossom should prioritize production by rank, i$.$e$.,$ ordering the products from $1$ to $3.$

$4.$If Blossom has only $246,000$ machine hours available, calculate the number of units of each table Blossom should produce to maximize its profit.

Answer rating: 100% (QA)

1 Prioritizing Production by Rank Based on Direct Labor Hours To determine the priority of production based on the bottleneck resource which is direct labor hours we need to consider the required labo... View the full answer