Maurice Tutor

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Category > Management Posted 06 Jan 2018 My Price 10.00

Mickey Company

Mickey Company manufactures three different sizes of stuffed teddy bears (large, small and medium d corresponding costs for the month of January 2004 are given below

  large medium small
projected sales (unit) 3000 5000 4000
  $ $ $
price per unit 40 30 20
variable cost per unit      
--direct material 12 10 8
--direct labour 8 5 3
-- supply cost 5 3 2
fixed cost per unit 2 2 2
total unit cost 27 20 15

It takes 20, 15 and 10 machine hours to manufacture 100 units of large, medium and small teddy bears, respectively. The company has a monthly machine hour capacity of 2,050 machine hours and this machine hour capacity cannot be increased for at least a year.

required

b) Determine how many units Mickey Company should produce of each size to maximise its profits.

required

c) Suppose that a foreign firm has offered to buy 2,000 large teddy bears at $45 each. Determine the opportunity costs for this order.

required

d) Suppose that the available machine hour capacity is reduced to 1,550 machine hours due to machine break down. How many units of each size should Mickey Company produce to maximise its profits?

Answers

Maurice Tutor
(5)
Status NEW Posted 06 Jan 2018 04:01 PM My Price 10.00

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