80.2K

Verified Solution

Link Copied!

64. uittle Toy Company makes and sells miniature doll houses. Little produces two kinds of houses Standard and Deluxe. The demand for doll houses is highest in November and December. this trend to continue Little is in Expecting terested in how to best utilize available capacity. Given the following information, what combination of doll houses should Little produce? StandardDeluxe 8,0003,000 $80 $25 $35 $35 $45 Demand Unit Price Unit variable cost Unit contribution margin Production rate (units per hour) Available production hours Total fixed costs $60 5,000 hrs $40,000 A. 8,000 Standard; 3,000 Deluxe. B. 8,000 Standard; 1,000 Deluxe. C. 5,000 Standard; 3,000 Deluxe. D. 3,636 Standard; 7,364 Deluxe. E. 3,636 Standard; 1,363 Deluxe. LO4-B 65. The general rule to apply to maximize profit when capacity is in short supply is: A. Minimize the contribution margin per unit of capacity. B. Maximize the margin of safety per unit of capacity C. Maximize the contribution margin per unit of capacity. Minimize the margin of safety per unit of capacity. Maximize the unit contribution margin. E. L04- 66. Handi-Tool Company manufactures and sells lawn and garden tools. Handi manufactures three kinds of pruning shears: Snip-it, Deluxe Clipper, and Limb-Away. The demand for the pruning shears is highest in April. Expecting this trend to continue, Handi is interested in how to best utilize available capacity. Given the following information, what combination of pruning shears should Handi-Tool produce? DeluxeAway Limb- Snip-it Clipper Away 200,000 100,000 60,000 Demand Unit Price Unit variable cost Unit contribution margin Production rate (units per hour) Available production hours Total fixed costs $30 $15 $10 $15 $20 $10 $50 5o $1S $20 8,000 hrs $400,000 25 15 A. 200,000 Snip-It; 100,000 Deluxe Clipper, O Limb-Away. B. 200,000 Snip-It; 60,000 Limb-Away; 0 Deluxe Clipper. C. 100,000 Deluxe Clipper; 60,000 Limb-Away; 0 Snip-It. D. 200,000 Snip-It; 100,000 Deluxe Clipper; 60,000 Limb-Away E. 150,000 Snip-It; 75,000 Deluxe Clipper, 45,000 Limb-Away. 04-B

Answer & Explanation Solved by verified expert

See Answer