U-Crack-Me-Up Windows, a Manufacturer of Windows, Is Experiencing a Bottleneck

question 185

Essay

U-Crack-Me-Up Windows, a manufacturer of windows, is experiencing a bottleneck in its plant.Setup time at one of its workstations has been identified as the culprit.A manager has proposed a plan to reduce setup time at a cost of $54,000.The change will result in 800 additional windows.The selling price per window is $180, direct labour costs are $60 per window, and the cost of direct materials is $95 per window.Assume all units produced can be sold.Required:
Determine the change in both contribution margin and throughput contribution from making the investment.Should the investment be made? Justify your answer.

---

Definitions:

Fungi

A domain of organisms capable of producing spores that consume organic matter, which includes entities such as molds, yeast, different types of mushrooms, and toadstools.

Products

In a chemical reaction, substances that are formed as a result of the reaction.

Primary Mycelium

A mycelium in which the cells are monokaryotic and haploid; a mycelium that grows from either an ascospore or a basidiospore. Compare with secondary mycelium.

Basidiomycetes

A class of fungi characterized by producing spores on club-shaped structures called basidia, including mushrooms, toadstools, and puffballs.