Constraining factors and product lines to emphasize
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Britt, located in St. Cloud, Minnesota, produces two lines to electric toothbrushes: deluxe and standard. Because Britt can sell all the toothbrushes it can produces, the owners are expanding the plant. They are deciding which product line to emphasize. To make this decision, they assemble the following data as attached.
After expansion, the factory will have a production capacity of 4,300 machine hours per month. the plant can manufacture either 65 standard elecetric toothbrushes or 23 deluxe electric toothbrushes per machine hour.
P19-26A
Per Unit
"Deluxe
Toothbrushes" "Standard
Toothbrushes"
Sale Price $80 $58
Variable Expense 21 19
Contribution margin $59 $39
Contribution margin ratio 73.80% 67.20%
1. Identify the constraining factor for Britt.
2. Prepare an analysis to show which product line to emphasize.
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Solution Summary
This solution helps identify constraining factors and prepare an analysis to show which product lines to emphasize.
Solution Preview
See attached file.
Solution is provided in a separate excel file attached. It contains following statements and explanatory notes.
1 Basic data
2 Analysis to show which product line to emphasize.
3 Constraining factor for ...
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