Answer & Explanation:BU330
Accounting for Managers
Directions:
Be sure to make an electronic copy of your answer before submitting
it to Ashworth College for grading.
Factoring resource constraints into
product mix decisions
Rose Incorporated manufactures
two types of vases, small and large. The following per-unit data are available.
Small
Vase Large Vase
Sale price $60 $100
Variable
costs $35 $60
Machine
hours required for 1 vase 1 2
Total fixed costs are $600,000,
and Rose Incorporated can sell a maximum of 25,000 units of each type of vase
annually. Machine hour capacity is 50,000 hours per year.
a.
Determine the contribution margin per unit for
each type of vase.
b.
Determine the contribution margin per machine
hour for each type of vase.
c.
Determine the number of units of each style of
vase that Rose Incorporated should produce to maximize operating income.
d.
What is the dollar amount of the maximum
operating income as calculated in C
above?
This is the end of Assignment 04.
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