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Table 5.3 King Supply Makes Four Different Types of Plumbing Fixtures: W

question 113

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Table 5.3
King Supply makes four different types of plumbing fixtures: W, X, Y and Z. The contribution margins for these products are: $70 for Product W, $60 for Product X, $90 for Product Y and $100 for Product Z. Fixed overhead is estimated at $5,500 per week. The manufacture of each fixture requires four machines, Machines #1, 2, 3 and 4. Each of the machines is available for 40 hours a week and there is no setup time required when shifting from the production of one product to any other. The processing requirements to make one unit of each product are shown in the table. Weekly product demand for the next planning period has been forecasted as follows: 70 Ws, 60 Xs, 50 Ys and 30 Zs.

In the questions that follow, the traditional method refers to maximizing the contribution margin per unit for each product, and the bottleneck method refers to maximizing the contribution margin per minute at the bottleneck for each product.
-Use the information in Table 5.3. Using the bottleneck method, what is the profit if Burdell manufactures the optimal product mix?

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High-Growth Markets

Markets that are experiencing or expected to experience significantly above-average growth in demand or sales, often offering lucrative opportunities for businesses.

Question Mark

In business, a term used in the Boston Consulting Group (BCG) matrix referring to products or business units with high growth potential but currently hold a small market share.

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The condition of a company or brand having a small percentage of total sales in its industry, often leading to less influence and profitability.

High-Growth Market

A market characterized by significantly higher than average growth rates, attracting numerous competitors and investment.