Fowler Industries Produces Two Bearings: C15 and C19

question 81

Essay

Fowler Industries produces two bearings: C15 and C19.Data regarding these two bearings follow.
A.Assume that Fowler decided to produce all C15s and purchase C19s only as needed.Determine the number of C19s to be purchased.
B.Compute the net benefit to the company of manufacturing (rather than purchasing)a unit of C15.Repeat the calculation for a unit of C19.(Note: in answering this question,do not take into consideration any machine hours constraint).
C.C15 consumes 2 hours of machine time,thus providing a net benefit of $1.50 per hour ($3 / 2).In contrast,C19 consumes 2.5 hours of time and produces a benefit of $1.20 per hour ($3 / 2.5).On the basis of this information,the company should focus on C15.
C.Fowler lacks sufficient machine time to produce all of the C15s and C19s needeD.Which component (C15 or C19)should Fowler manufacture first with the limited machine hours available? Why? Be sure to show all supporting computations.

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