Answer the following questions using the information below:
Captain Carl's Seascapes produces sea pictures for sale through catalogs. The company has two workstations, photo production and framing. The photo production station is limited by the speed of operating the photo development machine. Framing is limited by the speed of the employees. Framing normally waits for work from photo production. Each department works an eight-hour day. If Captain Carl's Seascapes adds an earlier half shift so that photo production begins work four hours earlier than framing each day, the two departments generally finish their work at about the same time. Not only does this eliminate the bottleneck, but it also increases finished units produced each day by 200 units. All units produced can be sold. The cost of operating the photo production department four more hours each day is $1,250. The contribution margin of the finished products is $10 each.
-What is the total production per day if the change is made?
A) 50 units
B) 200 units
C) 400 units
D) 600 units

Question

Quizplus · Accepted Answer

The change increases production by 200 units. Since the contribution margin is $10 per unit, the additional revenue is $2,000 (200 units x $10). The cost of operating the extra hours is $1,250, resulting in a net gain of $750. Therefore, the total production per day becomes 600 units (400 original units + 200 additional units).

Answer the Following Questions Using the Information Below