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Snowshoes R Us makes snowshoes. It currently produces 2,100 pairs of snowshoes per year. Its cost of making the bindings that are part of the snowshoes are as follows: Direct materials 17,530 Direct labor 2,900 Variable overhead 2,110 Fixed overhead 6,800 Total cost for 2,100 bindings 29,340 $ 12.00 each Showshoes has an offer from Better Bindings to sell bindings to Shoeshoes for Snowshoes would pay $ 1.00 3 per unit to transport the bindings to its manufacturing plant, where it would add its own 4 logo at a cost of 0.40 per logo 40 Requirement 4: 41 Remembering that showshoes can sell all the showshoes it produces, it desires to make 42 maximum use of its production facilities. 43 2 44 Snowshoes also makes a boogie board. 45 The boogie boards have a maximum demand of 10,000 units. 46 One machine makes both the boogie boards and showshoes. 47 The machine has a maximum capacity of 30,000 48 machine hours per year. 49 The contribution margin of the boogie board is 6.25 50 per unit. The snowshoe takes hours of machine 51 time to produce, the boogie board takes hours to produce. 52 Assume that Showshoes has been charging a price of $ 60.00 53 per pair of showshoes. 54 55 How many of each product should be produced with the capacity 56 of the machine? 57 58 1 Snowshoe Boogie 5 8 19 10 11 12 13 14 15 16 17 18 19 20 Equals # of products produced O 00 Snowshoes R Us makes snowshoes. It currently produces 2,100 pairs of snowshoes per year. Its cost of making the bindings that are part of the snowshoes are as follows: Direct materials 17,530 Direct labor 2,900 Variable overhead 2,110 Fixed overhead 6,800 Total cost for 2,100 bindings 29,340 $ 12.00 each Showshoes has an offer from Better Bindings to sell bindings to Shoeshoes for Snowshoes would pay $ 1.00 3 per unit to transport the bindings to its manufacturing plant, where it would add its own 4 logo at a cost of 0.40 per logo 40 Requirement 4: 41 Remembering that showshoes can sell all the showshoes it produces, it desires to make 42 maximum use of its production facilities. 43 2 44 Snowshoes also makes a boogie board. 45 The boogie boards have a maximum demand of 10,000 units. 46 One machine makes both the boogie boards and showshoes. 47 The machine has a maximum capacity of 30,000 48 machine hours per year. 49 The contribution margin of the boogie board is 6.25 50 per unit. The snowshoe takes hours of machine 51 time to produce, the boogie board takes hours to produce. 52 Assume that Showshoes has been charging a price of $ 60.00 53 per pair of showshoes. 54 55 How many of each product should be produced with the capacity 56 of the machine? 57 58 1 Snowshoe Boogie 5 8 19 10 11 12 13 14 15 16 17 18 19 20 Equals # of products produced O 00
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