Factoring Resource Constraints into Product Mix Decisions

Factoring Resource Constraints into Product Mix Decisions
Accounting Samples

General information
SMALL LARGE
Per part vase selling Cost 60 100
Variable Costs 35 60
Fixed Cost 600,000
UNITS = 25,000
Questions
Determine the donation edge per part control each fashion of vase.

Contribution= Sales –Variable Costs

Slight Vase=
Sales 25,000 x 60 = 1,500,000
Less Variable Costs 25,000 x 60 = 875,000
Therefore, donation edge = 625,000
Catholic vase =
Sales 25,000 x 100 = 2,500,000
Less Variable Costs 25,000 x 60 = 1,500,000
Therefore donation edge = 1,000,000

Determine the donation edge per implement hour control each fashion of vase.
Implement hour space is 50,000 hours

Control slight vase;

625,000÷ 50,000 = 12.5

Control catholic vase

1,000,000÷ 50,000 = 20

Determine the number of parts of each mode of vase that Rose Incorporated should acquisition to maximize detached pay.

Control the slight vase;
Completion costs = Fixed Costs + Variable Costs
Completion costs = 600000+875,000
= 1,475,000

Acquisition = Sales – Completion Costs
Acquisition = 1,500, 000 – 1,475,000
= 25,000
Acquisition = {Selling Cost (SP) x Quantity (Q)} – (F x VuQ)
So,
Quantity = F/(SP-Vu)
Quantity = 600,000 ÷ (60 – 35)
Quantity = 24, 000 UNITS

Control catholic vase;
Completion costs = Fixed Costs + Variable Costs
TC= 600,000 + 1,500,000
= 2,100,000
Acquisition = Sales – Completion Costs
= 2500000-2100000
= 400,000

Acquisition = {Selling cost (SP) x Quantity (Q)} – (F x VuQ)
Quantity =F/(SP-Vu)
Quantity = 600,000÷ (100-60)
Quantity = 15,000 UNITS

What the dollar whole of the apex detached pay is as conducive in C aloft?

Control Slight vase;
Quantity= 24,000 parts
Detached pay =Sales – Completion costs
Sales 24,000 x 60 = 1, 440,000
Less Variable Costs 24,000 x 35 = 840,000
Less Fixed costs 600,000 = (600,000)
____________
0
Therefore, in the slight vase mode using the parts in (c) aloft, there was no detached acquisition realized.

Control Catholic vase;
Sales 15,000 x 100 = 1,500,000
Less Variable costs 15,000 x 60 = 900,000
Less Fixed costs = (600,000)
_______________
0
It is superfluous to a break-even purpose where;
Completion wealth = completion costs
Acquisition = 0
(Whereby the acquisition is 0)

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