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Accounting 26th Edition by Carl Warren ,Jim Reeve ,Jonathan Duchac
Edition 26ISBN: 978-1337498159Accounting 26th Edition by Carl Warren ,Jim Reeve ,Jonathan Duchac
Edition 26ISBN: 978-1337498159 Exercise 28
Product decisions under bottlenecked operations
Youngstown Glass Company manufactures three types of safety plate glass: large, medium, and small. All three products have high demand. Thus, Youngstown Glass is able to sell all the safety glass that it can make. The production process includes an autoclave operation, which is a pressurized heat treatment. The autoclave is a production bottleneck. Total fixed costs are $85,000 for the company as a whole. In addition, the following information is available about the three products:
a. Determine the contribution margin by glass type and the total company income from operations for the budgeted units of production.
b. Prepare an analysis showing which product is the most profitable per bottleneck hour.
Youngstown Glass Company manufactures three types of safety plate glass: large, medium, and small. All three products have high demand. Thus, Youngstown Glass is able to sell all the safety glass that it can make. The production process includes an autoclave operation, which is a pressurized heat treatment. The autoclave is a production bottleneck. Total fixed costs are $85,000 for the company as a whole. In addition, the following information is available about the three products:
a. Determine the contribution margin by glass type and the total company income from operations for the budgeted units of production.
b. Prepare an analysis showing which product is the most profitable per bottleneck hour.
Explanation
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a.Step 1: Calculate unit contribution ma...
Accounting 26th Edition by Carl Warren ,Jim Reeve ,Jonathan Duchac
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