90.2K

Verified Solution

Link Copied!

More Info Data Table All fixed costs per unit are calculated based on a normal capacity usage consisting of 240 working days. When the number of working days exceeds 240, overtime charges raise the variable manufacturing costs of additional units by $3.00 per unit in Peoria and $7.00 per unit in Moline Peoria Moline Selling price Variable manufacturing cost per unit Fixed manufacturing cost per unit Variable marketing and distribution cost per unit Fixed marketing and distribution cost per unit Total cost per unit Operating income per unit Production rate per day Normal annual capacity usage Maximum annual capacity $ 158.00 S 158.00 Plummer Corporation is expected to produce and sell 192,000 power generators during the coming year. Wanting to take advantage of the higher operating income per unit at Moline, the company's production manager has decided to manufacture 96,000 units at each plant, resulting in a plan in which Moline operates at maximum capacity (320 units per day x 300 days) and Peoria operates at its normal volume (400 units per day x 240 days). 74.00 32.00 12.00 16.00 $ 86.00 16.00 12.00 11.00 134.00 125.00 $ 24.00 33.00 400 units 240 days 300 days 320 units 240 days 300 days Print Done Plummer Corporation produces the same power generator in two Iillinois plants, a new plant in Peoria and an older plant in Moline. The following data are available for the two plants click the icon to view the data table) (Click the icon to view the additional data.) Read the requirements Requirement 1. Calculate the breakeven point in units for the Peoria plant and for the Moline plant. units Peoria Moline Requirement 2. Calculate the operating income that would result trom the production managers plan to produce 96,000 units at each plant. Peoria Moline Operating income Requirement 3. Determine how the production of 192,000 units should be allocated between the Peoria and Moline plants to maximize operating income for Plummer Corporation. Show your calculations. (Use the contribution margin approach.) The optimal production plan is to produce units at the Moline plant. The units at the Peoria plant and capacity of the Peoria plant should be used because the than from units produced at the Moline plant Now show your calculations. Begin by calculating the total contribution margin for the Peoria plant. (For amounts with a $0 balance, make sure to enter "0 in the appropriate cell) Total Peoria Normal Overtime Total Calculate the total contribution margin for the Moline plant. (For amounts with a $0 balance, make sure to enter "O in the appropriate cell) - contribution margin - contribution margin Normal Choose from any list or enter any number in the input fields and then continue to the next

Answer & Explanation Solved by verified expert

See Answer