Rough Stuff makes 2 products: khaki shorts and khaki pants for men. Each product passes through the cutting machine area, which is the chief constraint during production. Khaki shorts take 15 minutes on the cutting machine and have a contribution margin per pair of shorts of $16. Khaki pants take 24 minutes on the cutting machine and have a contribution margin per pair of pants of $32. A) What the contribution margin per the constrained resource for khaki shorts? Round to the nearest penny, two decimal places. B) What the contribution margin per the constrained resource for khaki pants? Round to the nearest penny, two decimal places. C) Based on the contribution margin per the constrained resource, which product should Rough Stuff produce?
Rough Stuff makes 2 products: khaki shorts and khaki pants for men. Each product passes through the cutting machine area, which is the chief constraint during production. Khaki shorts take 15 minutes on the cutting machine and have a contribution margin per pair of shorts of $16. Khaki pants take 24 minutes on the cutting machine and have a contribution margin per pair of pants of $32. A) What the contribution margin per the constrained resource for khaki shorts? Round to the nearest penny, two decimal places. B) What the contribution margin per the constrained resource for khaki pants? Round to the nearest penny, two decimal places. C) Based on the contribution margin per the constrained resource, which product should Rough Stuff produce?
Chapter10: Short-term Decision Making
Section: Chapter Questions
Problem 11EA: Rough Stuff makes 2 products: khaki shorts and khaki pants for men. Each product passes through the...
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Rough Stuff makes 2 products: khaki shorts and khaki pants for men. Each product passes through the cutting machine area, which is the chief constraint during production. Khaki shorts take 15 minutes on the cutting machine and have a contribution margin per pair of shorts of $16. Khaki pants take 24 minutes on the cutting machine and have a contribution margin per pair of pants of $32.
A) What the contribution margin per the constrained resource for khaki shorts? Round to the nearest penny, two decimal places.
B) What the contribution margin per the constrained resource for khaki pants? Round to the nearest penny, two decimal places.
C) Based on the contribution margin per the constrained resource, which product should Rough Stuff produce?
D) If it is assumed that Rough Stuff has 4,800 hours available on the cutting machine to service a minimum demand for each product of 3,000 units, how much will profits increase if 100 more hours of machine time can be obtained?
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