Jon Wayne is in the dessert making business. He produces two special “dessert boxes”: (1) Cherry...

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Accounting

Jon Wayne is in the dessert making business. He produces twospecial “dessert boxes”: (1) Cherry Pop and (2) Chocolate Lover.His operating expenses total $2,000 per week. Jon is supported bythree staff members, who are each responsible for different partsof the dessert box production process.
• Bobo is responsible for ingredient mixing;
• Samuel is in charge of decorating the desserts; and
• Nancy is the hardest worker of the three. She packages thedesserts with great care.
The working capacities of these three workers are asfollows:
Activity (Person Assigned) Estimated minutes per week
Mixing (Bobo) 2,400
Decorating (Samuel) 2,400
Packaging (Nancy) 2,400
Other relevant information for the two products appearbelow:
Cherry Pop Chocolate Lover
Price per box $14.00 $12.00
Direct materials $2.00 $1.50
Demand per week 500 boxes 400 boxes
Required time required in each activity per box (in minutes) ispresented below:
Cherry Pop Chocolate Lover
Mixing 2 2
Decorating 2 3
Packaging 4 3
(a) Identify the binding constraint of Jon Wayne’s business.Show all working.
(b) Based on the constraint you identified, what is theproduction mix that would maximise profit under current productionconditions? Show all workings.
(c) Identify two actions that could be undertaken to ‘elevate’the constrain you identified in part (a). Explain how the actionsyou identified will elevate the current constraint.

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Solution Answer a Mixing hours required per week on the basis of demand 500 2 400 2 1800 Decorating hours required per week on the basis of demand 500 2 400 3 2200 Packaging hours required per week on the basis of demand 500 4 400 3 3200 Hours available for each activity on the basis of current See Answer

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Jon Wayne is in the dessert making business. He produces twospecial “dessert boxes”: (1) Cherry Pop and (2) Chocolate Lover.His operating expenses total $2,000 per week. Jon is supported bythree staff members, who are each responsible for different partsof the dessert box production process.• Bobo is responsible for ingredient mixing;• Samuel is in charge of decorating the desserts; and• Nancy is the hardest worker of the three. She packages thedesserts with great care.The working capacities of these three workers are asfollows:Activity (Person Assigned) Estimated minutes per weekMixing (Bobo) 2,400Decorating (Samuel) 2,400Packaging (Nancy) 2,400Other relevant information for the two products appearbelow:Cherry Pop Chocolate LoverPrice per box $14.00 $12.00Direct materials $2.00 $1.50Demand per week 500 boxes 400 boxesRequired time required in each activity per box (in minutes) ispresented below:Cherry Pop Chocolate LoverMixing 2 2Decorating 2 3Packaging 4 3(a) Identify the binding constraint of Jon Wayne’s business.Show all working.(b) Based on the constraint you identified, what is theproduction mix that would maximise profit under current productionconditions? Show all workings.(c) Identify two actions that could be undertaken to ‘elevate’the constrain you identified in part (a). Explain how the actionsyou identified will elevate the current constraint.