A company makes three products that have the following characteristics: Product A sells for $75 but needs $50 of materials to produce. It requires 5 minutes on the bottleneck Product B sells for $90 but needs $60 of materials to produce. It also requires 5 minutes on the bottleneck. Product C sells for $110 but needs $70 of materials to produce. It requires 10 minutes on the bottleneck. Using the traditional method, in what sequence should products be scheduled for production

Question

Business

Alden Singleton

27 January, 20:28

A company makes three products that have the following characteristics: Product A sells for $75 but needs $50 of materials to produce. It requires 5 minutes on the bottleneck Product B sells for $90 but needs $60 of materials to produce. It also requires 5 minutes on the bottleneck. Product C sells for $110 but needs $70 of materials to produce. It requires 10 minutes on the bottleneck. Using the traditional method, in what sequence should products be scheduled for production

+2

Answers (2)

Know the Answer?

Rhianna Trevino · Answer 1

Sequence is CBA

Explanation:

Contribution margins:

A = 75-50-5 = 20

B = 90-60-5 = 25

C = 110-70-10 = 30

Sequence is C, B, A

Aylin Preston · Answer 2

The products then should be scheduled for production in the sequence C, B, A

Explanation:

Acording to the details of the question Product A requires 5 minutes on the bottleneck, Product B requires 5 minutes on the bottleneck and Product C requires 10 minutes on the bottleneck.

So the Contribution margins of each of the products can be calculated as follows:

A = 75-50-5 = 20

B = 90-60-5 = 25

C = 110-70-10 = 30

The products then should be scheduled for production in the sequence C, B, A.