Vollmer Manufacturing makes three components for sale to refrigeration companies. The components are processed on two...
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Vollmer Manufacturing makes three components for sale to refrigeration companies. The components are processed on two machines: a shaper and a grinder. The times (in minutes) required on each machine are as follows. Machine Component Shaper Grinder 1 6 4 2 4 5 4 2 3 The shaper is available for 120 hours, and the grinder is available for 110 hours. No more than 200 units of component 3 can be sold, but up to 800 units of each of the other components can be sold. In fact, the company already has orders for 600 units of component 1 that must be satisfied. The per unit selling price and per unit variable costs for each of the three components are as follows. Component Selling Price Material Cost Labor Cost 1 $25 $12 $5 2 $18 $8 $4 3 $27 $13 $5 (a) For each component, calculate the profit margin (in dollars, profit margin selling price - material cost - labor cost). component 1 $ component 2. $ component 3 $ Formulate and solve for the recommended production quantities that will maximize contribution to profit. component 1 units component 2 units component 3 units Vollmer Manufacturing makes three components for sale to refrigeration companies. The components are processed on two machines: a shaper and a grinder. The times (in minutes) required on each machine are as follows. Machine Component Shaper Grinder 1 6 4 2 4 5 4 2 3 The shaper is available for 120 hours, and the grinder is available for 110 hours. No more than 200 units of component 3 can be sold, but up to 800 units of each of the other components can be sold. In fact, the company already has orders for 600 units of component 1 that must be satisfied. The per unit selling price and per unit variable costs for each of the three components are as follows. Component Selling Price Material Cost Labor Cost 1 $25 $12 $5 2 $18 $8 $4 3 $27 $13 $5 (a) For each component, calculate the profit margin (in dollars, profit margin selling price - material cost - labor cost). component 1 $ component 2. $ component 3 $ Formulate and solve for the recommended production quantities that will maximize contribution to profit. component 1 units component 2 units component 3 units
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To calculate the profit margin for each component we subtract the material cost and labor cost from ... View the full answer
Related Book For
Quantitative Methods for Business
ISBN: 978-0324651751
11th Edition
Authors: David Anderson, Dennis Sweeney, Thomas Williams, Jeffrey cam
Posted Date:
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