Academic Integrity: tutoring, explanations, and feedback — we don’t complete graded work or submit on a student’s behalf.

Soap Company manufactures Soap X and Soap Y and can sell all it can make of eith

ID: 2420998 • Letter: S

Question

Soap Company manufactures Soap X and Soap Y and can sell all it can make of either. Hours available to produce the products is the constrained resources. Based on the following data, if Soap could reduce the processing time for X by 10%, which of the following statements is true?

X

Y

$20   

$25

14  

15

3   

5

Possible answers:

It would take 162 minutes to process one unit of X.

There would be no difference in the contribution margin per hour as compared to it before the processing time reduction.

The contribution margin per hour for X would be $2.

Soap Y would still be the most profitable.

X

Y

Sales Price

$20   

$25

Variable Cost

14  

15

Hours needed to process

3   

5

Explanation / Answer

It would take 162 minutes to process one unit of X. Particulars X Y Sales Price                              20.00                              25.00 Variable Cost                              14.00                              15.00 Contribution per Unit= Sales - VC                                6.00                              10.00 Hours needed to process                                3.00                                5.00 Contribution per Hour                                2.00                                2.00 Contribution per hour is same for both the products in exiting situation If processing time is reduced by 10% Time for X = 3 * 90% 2.7 Hours 2.7 Hours = 2.7 * 60 Minutes = 162 Minutes Particulars X Y Sales Price                              20.00                              25.00 Variable Cost                              14.00                              15.00 Contribution per Unit= Sales - VC                                6.00                              10.00 Hours needed to process                                2.70                                5.00 Contribution per Hour                                2.22                                2.00

Hire Me For All Your Tutoring Needs
Integrity-first tutoring: clear explanations, guidance, and feedback.
Drop an Email at
drjack9650@gmail.com
Chat Now And Get Quote