Question: Can this be solved by an accounting expert instead? Question 4 . 1 ( Total: 3 3 marks ) Hot Wheels Ltd . makes small
Can this be solved by an accounting expert instead? Question Total: marks
Hot Wheels Ltd makes small motorcycles. The monthly demand ranges from to motorcycles. The average demand is motorcycles. The plant operates hours a month. Each motorcycle takes approximately hours.
If the company adds a new line of scooters, initial demand will be per month. Each scooter will take hour to make. To offset approaching production capacity, expanding the assembly line is possible. This will decrease manufacturing time for all products by percent. However, this will increase the costs of motorcycle cycles from $ to $ and scooters from $ to $ The change will also cause increases in prices from $ to $ for motorcycles and from $ to $ for scooters.
Required
What is the average waiting time for motorcycles if they are the only item manufactured?
What is the average waiting time if both motorcycles and scooters are produced and the assembly line is not enlarged?
What is the average waiting time if both motorcycles and scooters are produced and the assembly line is enlarged?
What is the expected monthly margin without scooters if the company sells all motorcycles it manufactures?
What are the expected monthly contribution margins if scooters are made with the current assembly line and with the new assembly line? Assume average sales and that sales equals production.
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