Austin Enterprises makes and sells three types of dress shirts. Management is trying to determine the most profitable mix. Sales prices, demand, and...

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Austin Enterprises makes and sells three types of dress shirts. Management is trying to determine the most profitable mix. Sales prices, demand, and use of manufacturing inputs follow:BasicClassicFormalSales price$38$66$185Maximum annual demand (units)22,00015,00032,000Input requirement per unit Direct material0.6yards0.2yards0.5yardsDirect labor0.8hours 2hours 7hours CostsVariable costsMaterials$22per yard Direct labor$18per hourFactory overhead$3per direct labor-hourMarketing10% of sales priceAnnual fixed costsManufacturing $54,000 Marketing $9,500 Administration$48,000The company faces two limits: (1) the volume of each type of shirt that it can sell (see maximum annual demand) and (2) 43,000 direct labor-hours per year caused by the plant layout.d-1. Calculate the contribution margin for each type of dress shirt using the table below.   b-1. Compute the contribution margin for each shirt per the constrained resource, direct labor. (Do not round intermediate calculations. Round your final answers to 3 decimal places.)

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Austin Enterprises makes and sells three types of dress shirts. Management is trying to determine the most profitable mix. Sales prices, demand, and...

  • Written in: 17-Oct-2019
  • Paper ID: 5996851
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DATE ANSWERED

Oct 17, 2019

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