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Table 7.6 Burdell Industries Makes Four Different Models of Computer Printers: the Printers

question 63

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Table 7.6
Burdell Industries makes four different models of computer printers: the E-1000,the S-2000,the P-2000 and the N-1000.The E-1000 sells for $200 and has $40 in parts and $40 in labor;the S-2000 sells for $150 and requires $30 in parts and $30 in labor;the P-2000 sells for $100 and has $20 in parts and $20 in labor;and the N-1000 sells for $75 but requires only $10 of parts and $10 of labor.Fixed overhead is estimated at $5,000 per week.The manufacture of each printer 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: 80 E-1000s;65 S-2000s;35 P-2000s;and 20 N-1000s. Table 7.6 Burdell Industries makes four different models of computer printers: the E-1000,the S-2000,the P-2000 and the N-1000.The E-1000 sells for $200 and has $40 in parts and $40 in labor;the S-2000 sells for $150 and requires $30 in parts and $30 in labor;the P-2000 sells for $100 and has $20 in parts and $20 in labor;and the N-1000 sells for $75 but requires only $10 of parts and $10 of labor.Fixed overhead is estimated at $5,000 per week.The manufacture of each printer 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: 80 E-1000s;65 S-2000s;35 P-2000s;and 20 N-1000s.   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 7.6.Using the traditional method,what is the optimal product mix? A) 120 E,90 S,60 P,55 N B) 60 E,20 S,50 P,33 N C) 80 E,65 S,35 P,5 N D) 80 E,65 S,20 P,35 N 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 7.6.Using the traditional method,what is the optimal product mix?

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Definitions:

Matures

The point in time when a financial instrument, such as a bond or loan, reaches its due date and must be repaid or redeemed.

Accounts Receivable Turnover

A financial ratio indicating how many times a company's receivables are turned over during a specific period, often used to assess the effectiveness of credit and collection policies.

Net Sales

The revenue from the sale of goods or services after deducting returns, allowances, and discounts.

Accounts Receivable Turnover

A financial metric that measures how often a company collects its average accounts receivable balance within a period.

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