Factoring resource constraints into product mix decisions, assignment help

Save your time - order a paper!

Get your paper written from scratch within the tight deadline. Our service is a reliable solution to all your troubles. Place an order on any task and we will take care of it. You won’t have to worry about the quality and deadlines

Order Paper Now

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?