Question 4 (of 7 Save & Exit Submlt 4. 10.00 points Blossom, Inc., is a small co

Question

Question 4 (of 7 Save & Exit Submlt 4. 10.00 points Blossom, Inc., is a small company that manufactures three versions of patio tables. Unit information for its products S 38 6 42 $ 56 Sales price Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead 7 3 Required number of labor hours Required number of machine hours 0.50 0.50 1.00 4.0 2.50 2.0 Blossom has determined that it can sell a limited number of each table in the upcoming year. Expected demand for each model follows: Table A Table B Table C 50,000 units 20,000 units 30,000 units Required 1. Suppose that direct labor hours has been identfied as the bottleneok resource, Determine how Blossom should prioritize production by rank ordering the products from 1 to 3 Product Ranking

Explanation / Answer

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2.

Table A Table B Table C Sales price $38 $42 $56 Less: Direct Materials 6 7 8 Direct Labor 1 3 7 Variable manufacturing overhead 2 2 2 Contribution Margin per unit $29 $30 $39 Labor hours per unit .50 .50 1.00 Contribution margin per hour $58 $60 $39 Ranking 2 1 3

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