Product Decisions Under Bottlenecked Operations Youngstown Glass Company manufactures three types of safety plate glass: large,...
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Product Decisions Under Bottlenecked Operations Youngstown Glass Company manufactures three types of safety plate glass: large, medium, and small. All three products have high demand. Thus, Youngstown Glass is able to sell all the safety glass it can make. The production process includes an autoclave operation, which is a pressurized heat treatment. The autoclave is a production bottleneck. Total fixed costs are $126,000 for the company as a whole. In addition, the following information is available about the three products: Unit selling price Unit variable cost Large Medium Small $296 $154 $174 233 126 153 Unit contribution margin $63 $28 $21 Autoclave hours per unit 6 4 2 Total process hours per unit 12 8 6 Budgeted units of production 2,500 2,500 2,500 a. Determine the contribution margin by glass type and the total company income from operations for the budgeted units of production. Units produced Revenues Less: Variable costs Contribution margin Large Medium Small Total Less: Fixed costs Income from operations b. Prepare an analysis showing which product is the most profitable per bottleneck hour. Round the "Unit contribution margin per production bottleneck hour" amounts to the nearest cent. Large Medium Small Unit selling price Unit variable cost Unit contribution margin Autoclave hours per unit $154 $174 126 153 $28 $21 4 2 Total process hours per unit 12 8 6 Budgeted units of production 2,500 2,500 2,500 a. Determine the contribution margin by glass type and the total company income from operations for the budgeted units of production. Units produced Revenues Less: Variable costs Contribution margin Large Medium Small Total Less: Fixed costs Income from operations b. Prepare an analysis showing which product is the most profitable per bottleneck hour. Round the "Unit contribution margin per production bottleneck hour" amounts to the nearest cent. Unit contribution margin Autoclave hours per unit Unit contribution margin per production bottleneck hour Large Medium Small Product Decisions Under Bottlenecked Operations Youngstown Glass Company manufactures three types of safety plate glass: large, medium, and small. All three products have high demand. Thus, Youngstown Glass is able to sell all the safety glass it can make. The production process includes an autoclave operation, which is a pressurized heat treatment. The autoclave is a production bottleneck. Total fixed costs are $126,000 for the company as a whole. In addition, the following information is available about the three products: Unit selling price Unit variable cost Large Medium Small $296 $154 $174 233 126 153 Unit contribution margin $63 $28 $21 Autoclave hours per unit 6 4 2 Total process hours per unit 12 8 6 Budgeted units of production 2,500 2,500 2,500 a. Determine the contribution margin by glass type and the total company income from operations for the budgeted units of production. Units produced Revenues Less: Variable costs Contribution margin Large Medium Small Total Less: Fixed costs Income from operations b. Prepare an analysis showing which product is the most profitable per bottleneck hour. Round the "Unit contribution margin per production bottleneck hour" amounts to the nearest cent. Large Medium Small Unit selling price Unit variable cost Unit contribution margin Autoclave hours per unit $154 $174 126 153 $28 $21 4 2 Total process hours per unit 12 8 6 Budgeted units of production 2,500 2,500 2,500 a. Determine the contribution margin by glass type and the total company income from operations for the budgeted units of production. Units produced Revenues Less: Variable costs Contribution margin Large Medium Small Total Less: Fixed costs Income from operations b. Prepare an analysis showing which product is the most profitable per bottleneck hour. Round the "Unit contribution margin per production bottleneck hour" amounts to the nearest cent. Unit contribution margin Autoclave hours per unit Unit contribution margin per production bottleneck hour Large Medium Small
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