Leach Finishing makes various metal fittings for the construction industry. Three of the fittings, models X-12, X-24, and X-30, require grinding on a patented machine of which Leach has only one. The cost of production information for the three products follow: X-12 $ 35 $ 20 18.0 X-24 $51 $ 27 12.5 X-30 Price per fitting Variable cost per fitting Units per hour of grinding The testing machine used for both models has a capacity of 3,230 hours annually. Fixed manufacturing costs are $496,000 annually. $70 $44 10.0 Required: a. Suppose that Leach Finishing can sell at most 59,200 units of any one fitting. How many units of each fitting model should Leach Finishing produce annually? b. Suppose that Leach Finishing can sell at most 18,000 units of any one fitting. How many units of each fitting should Leach Finishing produce annually?
Leach Finishing makes various metal fittings for the construction industry. Three of the fittings, models X-12, X-24, and X-30, require grinding on a patented machine of which Leach has only one. The cost of production information for the three products follow: X-12 $ 35 $ 20 18.0 X-24 $51 $ 27 12.5 X-30 Price per fitting Variable cost per fitting Units per hour of grinding The testing machine used for both models has a capacity of 3,230 hours annually. Fixed manufacturing costs are $496,000 annually. $70 $44 10.0 Required: a. Suppose that Leach Finishing can sell at most 59,200 units of any one fitting. How many units of each fitting model should Leach Finishing produce annually? b. Suppose that Leach Finishing can sell at most 18,000 units of any one fitting. How many units of each fitting should Leach Finishing produce annually?
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter10: Property, Plant And Equipment: Acquisition And Subsequent Investments
Section: Chapter Questions
Problem 7P: Self-Construction Olson Machine Company manufactures small and large milling machines. Selling...
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