BU330Accounting for Managers
Directions: Be sure to make an electronic copy of your answer before submittingit to Ashworth College for grading.
Factoring resource constraints intoproduct mix decisions
Rose Incorporated manufacturestwo types of vases, small and large. The following per-unit data are available.
SmallVase Large Vase
Sale price $60 $100
Variablecosts $35 $60
Machinehours required for 1 vase 1 2
Total fixed costs are $600,000,and Rose Incorporated can sell a maximum of 25,000 units of each type of vaseannually. Machine hour capacity is 50,000 hours per year.
a. Determine the contribution margin per unit foreach type of vase.
b. Determine the contribution margin per machinehour for each type of vase.
c. Determine the number of units of each style ofvase that Rose Incorporated should produce to maximize operating income.
d. What is the dollar amount of the maximumoperating income as calculated in Cabove?
This is the end of Assignment 04.