Accounting for Managers, BU330 assignment help

BU330 Accounting for Managers

Directions: ; Be sure to make an electronic copy of ;your answer before submitting it to Ashworth College for grading.

Factoring resource constraints into product mix decisions

Rose Incorporated manufactures two types of vases, small and large. The following per-unit data are available.

; Small Vase ; Large Vase

Sale price ; $60 ; $100

Variable costs ; $35 ; $60

Machine hours required for 1 vase ; 1 ; 2

Total fixed costs are $600,000, and Rose Incorporated can sell a maximum of 25,000 units of each type of vase annually. Machine hour capacity is 50,000 hours per year.

a. ; Determine the contribution margin per unit for each type of vase.

b. ; Determine the contribution margin per machine hour for each type of vase.

c. ; Determine the number of units of each style of vase that Rose Incorporated should produce to maximize operating income.

d. ; What is the dollar amount of the maximum operating income as calculated in C above?

This is the end of Assignment 04.