Austin enterprises makes and sells three types of dress shir

Assignment Help Business Management
Reference no: EM13305404

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:

Basic Classic Formal
Sales price $ 30 $ 64 $ 190
Maximum annual demand (units) 20,000 10,000 30,000
Input requirement per unit
Direct material 0.5 yards 0.3 yards 0.6 yards
Direct labor 0.7 hours 2 hours 7 hours

Costs
Variable costs
Materials $ 20 per yard
Direct labor $ 16 per hour
Factory overhead $ 4 per direct labor-hour
Marketing 10 % of sales price
Annual fixed costs
Manufacturing $ 36,000
Marketing $ 8,000
Administration $ 30,000

The company faces two limits: (1) the volume of each type of shirt that it can sell (see maximum annual demand) and (2) 30,000 direct labor-hours per year caused by the plant layout.

Required:
a. How much operating profit could the company earn if it were able to satisfy the annual demand?
b. Which of the three product lines makes the most profitable use of the constrained resource, direct labor?
Classic
Basic
Formal
c. Given the information in the problem so far, what product mix do you recommend?
Classic and Basic
Basic and Formal
Classic and Formal
d. How much operating profit should your recommended product mix generate? (If needed, round your units to produce number downward to the nearest whole number.)
e. Suppose that the company could expand its labor capacity by running an extra shift that could provide up to 10,000 more hours. The direct labor cost would increase from $16 to $19 per hour for all hours of direct labor worked during the extra shift. What additional product(s) should Austin manufacture and what additional profit would be expected with the use of the added shift? (Round your answer to 2 decimal places.)

Reference no: EM13305404

Questions Cloud

How much will the total taxes of western exploration corp : How much will the total taxes of western exploration corp. be reduced as a result of the tax loss carryforward?
Obtain the moment of inertia of the wheel : A rope is wrapped around a wheel of radius R=2.0 meters. The wheel is mounted with frictionless bearings on an axle through its center. What is the moment of inertia of the wheel
What effective annual interest rate will blenman end up : If the exchange rate remains at 5.10 pesos per dollar through the end of the loan period, what effective annual interest rate will Blenman end up paying on the loan?
How many bright fringes are visible on the screen : Coherent light of wavelength 540.4 nm is sent through two parallel slits in an opaque material. Each slit is 0.700 µm wide. How many bright fringes are visible on the screen
Austin enterprises makes and sells three types of dress shir : 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:
What is the annualized rate of return to the swiss investor : Today, at maturity, the exchange rate is 1.324 Swiss francs per dollar. What is the annualized rate of return to the Swiss investor?
How old are they when john returns : John takes off for Vega (d ~ 25LY) traveling at 99.99% the speed of light. As soon as he arives, the ship turns around, How old are they when John returns
Describe the key elements of an information system for an mc : Describe the key elements of an information system for an MCO. What elements are different than for a physician office or group?
Determine how much money the homeowner would have saved : If t his house were heated instead by a heat pump that has an average COP of 2.4, determine how much money the homeowner would have saved that month. Assume the price of electric power is $0.085 per kW - hr.

Reviews

Write a Review

Business Management Questions & Answers

  The development of business operations

Why are performance objectives so significant for the development of business operations.

  A strategy of related diversification

Hi! I need help with the part of the assignment which states "and be prepared to justify the extent to which the value chains of Disney's different businesses seem to have competitively valuable cross-business relationships."

  Explain the executive and the independent administrative

Explain the "executive" and the "independent" administrative agencies. The primary distinction between the two types of agencies is that the heads of executive administrative agencies are appointed by the president and serve

  Explain what problems might be involved in attempting

Explain What problems might be involved in attempting to utilize attitude measures to predict specific behavior

  I want a swot analysis

I want a SWOT Analysis for Azul Linhas Aereas Brasileiras - A SWOT action matrix for azul linhas aereas brasileiras - And a SWOT analysis for azul linhas aereas brasileiras

  Define the current value of an option to buy one share

Define the current value of an option to buy one share of Juice stock one year from now at a price of $60

  Evaluate product strategies-product life cycles

Evaluate product strategies, product life cycles and product identification and find out which is the most important to get right. Explain your rationale.

  Explain what was the productivity index for chester

The direct labor costs for Chester were $32,460. These labor costs could have been $20,000 higher if investments in training that increased productivity had not been made. What was the productivity index for Chester that led to such savings?

  Explain and generate point redemption level one diagram

Explain and Generate Point Redemption Level 1 Diagram and Generate Customer Reports Level 1 Diagram

  Different cultures from the individualistic

For a global management team, are there some good suggestions as to how to handle the necessity to communicate 24 hours a day and still maintain your sanity?

  Presume that a company required to write a mission statement

Presume that a company required to write a mission statement for its value supply chain. Such a mission statement might comprise statements about customers, suppliers

  Illustrate what kinds of impact on countries poor records

Illustrate what kinds of impact can countries with poor track records of adhering to the laws of international business practices have on the global economy?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd