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Sales in Units(#) Regular Deluxe 2018 #15,730 #16,000 Production volume 2018 #18,876 #16,320 All items produced...

Sales in Units(#) Regular Deluxe
2018 #15,730 #16,000
Production volume
2018 #18,876 #16,320

All items produced are either sold or disposed of. No inventory is kept, faulty items are discarded at $41 per unit disposal fee. Total production capacity = 36,000

Regular Deluxe
2019 demand #20,000 #20,000
Selling price 770 878
DM/DL cost 320 400
VM/OH cost 88 99
Commission 0 33

The manager now has realized that the cost of disposal and the cost of faulty units must be incorporated into the cost model. What is the optimal production plan for 2019?

Produce_______#regular

Produce_______#deluxe

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Answer #1

Arolysis of 2o(8 De lure Regularn Pooduetian Yolume - Sales in nits 88 76 IS730 6320 16oo0 320 units discosded dis bosa] fee eromit$uy 3ly6 $41 $13120 Total dish sal Ree $128986 To tol Production Copaity36o00 unite 3s19ç units Cabacity uit isec C18876+/6320) These is undes ulisathion of CabacityPooftability Stakement 2018 Sales Poice Pu less:- DM]DL Cost (uwithout dis bosal Pee) Regulas 770 320 Dop 878 yb0 vm/OH cos Commissian Contibution p. ろ62. 346 Number of Units Sold IS下30 6000 SS 36 00o S6q4260 corthout Consldeoing distosol ee Pooftobility Statement 2013 cheter Considenm dsksol Regular Deluxe 56qy260 SS 36006 Total Pofit Eaoned coithouk Considesng disposal fee 312t 28986 less! Dispesa) Aee Ss 2288Analysis of Infoomation Aunilable for 209 Exbected demond C20cco+20000) Ponduxtion ashority yocoo 36000 yooo Shoot As-the mesoute s-au ark be-ale mot-sufficient-t meet-the- exbected clemand -then ours obrecHue Should be to uhlise the vesousces fost in the Produck Prom Whors we can maximum Corotibution Since the Contmbution in Reguay pndut ($362) is highes than Deluse Prortuet u2) we hauo to Past meot the marimum demand of Requau than Deluxe Budgeted borohita bility Statement 20 19 Regula Dejuxe 346 20000 362 20000 Expected demand Prefevence Rating Pessible enE Sold 20000 l6o00 Cbal SS3600b Total Contibutian CO Note.- Theve is no dishosal cost as pmduction gapscity is felly uutilised thee is no invenyhence optimum budget Schedue is as undes Regular 20 Deluxe : (6ooo 18 oo0

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