Motorcycle Production Services produces miniature motorcycles.The company has two departments,the painting department and the sanding department.The painting department is constrained by the speed of the employees that operate the sanding machines.The employees that work in painting always receive late work from the employees in the sanding department.
Each employee works a seven-hour day.To relieve the bottleneck constraint,the manager at Motorcycle Production Services believes they can add an additional half-day shift to the sanding department.The manager believes they can begin work three and one-half hours earlier than the employees in the painting department,and all employees in each department can end their workday at the same time.
The manager expects to increase finished units produced each day by 180 units.All units produced can be sold and the managerial accountant reported that the cost of an increase in operating the sanding department by three and one-half hours each day is $1,400 and the contribution margin of the finished products is $12 each.Inventory carrying cost is $0.45 per day.
Required:
What is the total production per day if the manager adds the extra shift? Compute the change in the daily contribution margin if the manager implements the change.

Question

Quizplus · Accepted Answer

A)Units per hour = [(180 units/3.5)] = 51.43 (rounded)units per hour: 51.43 × 10.5 = 540.01 units per day
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Motorcycle Production Services Produces Miniature Motorcycles