How many of each bicycle should be produced to maximize profits?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Akimoto’s Bicycle Co assembles three types of bicycles: Charger, Sublime, Kidde. Due to their residential location they operate with one 8 hour shift, 5 days per week, 50 weeks a year. Balancing the bikes is the bottleneck. The information about production time and costs for these three bicycles are (Refer the attached image)

  1. How many of each bicycle should be produced to maximize profits?
  2. What qualitative factors would you need to consider?

 

Charger
Sublime
Kidde
Hours to produce
Selling price
2
1.75
0.5
$600
$300
$200
$ 50
$ 75
$ 25
Direct material
$100
$ 75
Direct labor
$150
$100
$ 50
$ 25
$ 25
$ 25
Variable overhead
Fixed overhead
$ 20
Transcribed Image Text:Charger Sublime Kidde Hours to produce Selling price 2 1.75 0.5 $600 $300 $200 $ 50 $ 75 $ 25 Direct material $100 $ 75 Direct labor $150 $100 $ 50 $ 25 $ 25 $ 25 Variable overhead Fixed overhead $ 20
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