Conroy Company manufactures two products-B100 and A200. The company provided the following information with respect to...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
Conroy Company manufactures two products-B100 and A200. The company provided the following information with respect to these products: B100 A200 Estimated customer demand (in units) Selling price per unit Variable expenses per unit 2,800 $1,200 $ 700 2,000 $2,100 $1,200 The company has four manufacturing departments-Fabrication, Molding, Machining, and Assemble & Pack. The capacity available in each department (in hours) and the demands that one unit of each of the company's products makes on those departments is as follows: B100 A200 Сараcity (in hours) (hours per unit) (hours per unit) Fabrication Molding Machining Assemble & Pack 2 4,000 6,000 5,000 4,500 2 2 The company is trying to decide what product mix will maximize profits. Given that its fixed costs will not change regardless of the chosen mix, the company plans to identify the product mix that maximizes its total contribution margin. Click here to download the Excel template, which you will use to answer the questions that follow. 4. In the Excel template, navigate to the "Requirement 4" tab. Using Solver: a. Calculate the maximum contribution margin the company can earn given the capacities of its four manufacturing departments. b. How many units of each product would the company produce to earn the contribution margin from requirement 4a? c. Is your answer to requirement 4a greater than, less than, or equal to your answer from 3d? d. Which of the following best explains the reason for the answer to requirement 4c? 203 Home Page Layout Formulas Data Review View + Share Insert X Cut > AutoSum Calibri (Body) 11 - A- A- E Wrap Text General 9 Copy Сору E Fill B I U A 24 +.0 .00 • % 00 . Conditional Format Formatting as Table Paste H Merge & Center ) Cell Insert Delete Format Sort & Filter .0 Format Styles Clear : x v fx H20 A B C D E F G H K 1. Conroy Company 2 Volume Trade-Off Decisions with More Than One Constraint 3 4 Contribution Margin Analysis Departmental Data: Hours Demanded per Unit and Capacity Available A200 Сарacity (in Hours) 5 B100 6. B100 A200 (Hours per Unit) (Hours per Unit) B100 Max Units A200 Max Units 7 Units sold Fabrication 2 4,000 8 Selling price 9 Variable expense per unit 1,200 $ 2,100 Molding 2 6,000 $ 700 $ 1,200 Machining 2 5,000 10 Contribution margin per unit 500 $ 900 Assemble & Pack 3 4,500 11 Contribution margin per hour 12 13 B100 A200 Total Departmental Data: Used vs. Unused Capacity (in Hours) 14 Sales $ $ B100 A200 Used Unused 15 Variable expenses $ Fabrication 4,000 16 Contribution margin $ Molding 6,000 17 Machining 5,000 18 Assemble & Pack 4,500 19 20 21 22 23 24 25 Requirements 1-3 Requirement 4 Requirement 5 Requirement 7 Requirement 8 + Conroy Company manufactures two products-B100 and A200. The company provided the following information with respect to these products: B100 A200 Estimated customer demand (in units) Selling price per unit Variable expenses per unit 2,800 $1,200 $ 700 2,000 $2,100 $1,200 The company has four manufacturing departments-Fabrication, Molding, Machining, and Assemble & Pack. The capacity available in each department (in hours) and the demands that one unit of each of the company's products makes on those departments is as follows: B100 A200 Сараcity (in hours) (hours per unit) (hours per unit) Fabrication Molding Machining Assemble & Pack 2 4,000 6,000 5,000 4,500 2 2 The company is trying to decide what product mix will maximize profits. Given that its fixed costs will not change regardless of the chosen mix, the company plans to identify the product mix that maximizes its total contribution margin. Click here to download the Excel template, which you will use to answer the questions that follow. 4. In the Excel template, navigate to the "Requirement 4" tab. Using Solver: a. Calculate the maximum contribution margin the company can earn given the capacities of its four manufacturing departments. b. How many units of each product would the company produce to earn the contribution margin from requirement 4a? c. Is your answer to requirement 4a greater than, less than, or equal to your answer from 3d? d. Which of the following best explains the reason for the answer to requirement 4c? 203 Home Page Layout Formulas Data Review View + Share Insert X Cut > AutoSum Calibri (Body) 11 - A- A- E Wrap Text General 9 Copy Сору E Fill B I U A 24 +.0 .00 • % 00 . Conditional Format Formatting as Table Paste H Merge & Center ) Cell Insert Delete Format Sort & Filter .0 Format Styles Clear : x v fx H20 A B C D E F G H K 1. Conroy Company 2 Volume Trade-Off Decisions with More Than One Constraint 3 4 Contribution Margin Analysis Departmental Data: Hours Demanded per Unit and Capacity Available A200 Сарacity (in Hours) 5 B100 6. B100 A200 (Hours per Unit) (Hours per Unit) B100 Max Units A200 Max Units 7 Units sold Fabrication 2 4,000 8 Selling price 9 Variable expense per unit 1,200 $ 2,100 Molding 2 6,000 $ 700 $ 1,200 Machining 2 5,000 10 Contribution margin per unit 500 $ 900 Assemble & Pack 3 4,500 11 Contribution margin per hour 12 13 B100 A200 Total Departmental Data: Used vs. Unused Capacity (in Hours) 14 Sales $ $ B100 A200 Used Unused 15 Variable expenses $ Fabrication 4,000 16 Contribution margin $ Molding 6,000 17 Machining 5,000 18 Assemble & Pack 4,500 19 20 21 22 23 24 25 Requirements 1-3 Requirement 4 Requirement 5 Requirement 7 Requirement 8 +
Expert Answer:
Answer rating: 100% (QA)
a B100 A200 Estimated customer demand 2800 2000 Particulars Amount Amount Selling Price per unit 120... View the full answer
Related Book For
Accounting Business Reporting for Decision Making
ISBN: 9780730302414
4th edition
Authors: Jacqueline Birt, Keryn Chalmers, Albie Brooks, Suzanne Byrne, Judy Oliver
Posted Date:
Students also viewed these accounting questions
-
Design a base plate of W14 section determined in problem 1 for a compression member. The total service load that a member can carry is 1422 KN with a dead-to-live load ratio of 5:11. The base plate...
-
a. Prepare a profit graph for Donaldson Company. To prepare your graph, use sales volumes of zero units and 50,000 units as shown in cells B23 and B24. As a first step, create a formula in cell C23...
-
Jeepster Company manufactures two products, hard-tops and covers for their convertible vehicles. Data for each follows: Only 20,000 direct labor hours are available per month. How many units of each...
-
What is the MFD? UFD? How are they related?
-
Why do some managers have difficulties in delegating authority? Why do you think this problem may be more pronounced in small businesses?
-
What is the formula to compute interest on a note receivable?
-
A university pumps its water from wells located on campus. The falling water table has caused pumping costs to increase, the quantity of water available to decrease, and the quality of water to...
-
Presented below is the December 31 trial balance of New York Boutique. Instructions(a) Construct T-accounts and enter the balances shown.(b) Prepare adjusting journal entries for the following and...
-
Prove that the series (1+3i)" zn n= 4" n ln (n) converges for all z such that || 2. Here In: (0, ) R is the natural logarithm.
-
In the drawing below you can see a cut through a bevel gear box. The torque from the drive side (1) is transmitted with the bevel gear (2) to the outcome side (3). The drawing has some design flaws...
-
1. Johnson Inc began operations in 20X1. In that year, the company earned net income of $145,000 and paid dividends of $1.25 per share on each of its 30,000 outstanding common shares. Calculate...
-
2005 Retained earnings: $ 2.000.000 Common stock: $ 500.000 Paid in capital: $ 3.000.000 Net income for year: $ 900,000 2004 Retained earnings: $ 1,300,000 Common stock: $ 500,000 Paid in capital: $...
-
A company is introducing a product that can sell at: 10 DOP per unit, it is estimated that the volume of sales to be made is 200,000 units the first year and for the following years an increase of 5%...
-
If the point on a wave takes a time of 0.033 s to go from the maximum displacement to the first equilibrium position, what is the frequency of the wave?
-
Access the most recent annual report of a public company to analyze the return on sales and the current ratio. What do these ratios tell you about the profitability and liquidity of the business? If...
-
Leon knows that his first four test grades were 86, 95, 98, and 88. Use the formula x = x1 + x2 + ...+Xn 2 + win to find Leon's grade on the fifth test if his test average is 90.2.
-
What does liability mean for doctors, and what are some issues that can create liability for doctors
-
Determine the resultant moment produced by the forces about point O. 0.25 m 0.125 m, 0 0.3 m- 60 F = 500 N F = 600 N
-
Are ethics and corporate governance important topics in the study of accounting and the business environment? Why?
-
a) Explain: i) What is meant in financial accounting by the stable monetary unit convention? ii) How the convention affects the reporting of assets on the balance sheet. b) Suggest three reasons why...
-
Ontrack Company produces compasses for cross-country skiing. The production capacity is 50 000compasses, and the company is currently operating at 80 per cent capacity. Variable manufacturing costs...
-
Using the knowledge you gained from your interview in mini case 1 , design an interface for the individual you interviewed. What interface design modifications are you making so that the program will...
-
The capital market line, CML, is the graph of the risk and return of portfolio combinations consisting of the risk-free asset and: A. Any risky portfolio. B. The market portfolio. C. The leveraged...
-
Relative to portfolios on the CML, any portfolio that plots above the CML is considered: A. Inferior. B. Inefficient. C. Unachievable.
Study smarter with the SolutionInn App