Russian RiverRubber Rafts, (“4R”), is a river tube manufacturing company. Summer is rapidly...

Question

Russian RiverRubber Rafts, (“4R”), is a river tube manufacturing company. Summer is rapidly approaching, and 4R only has 200 pounds of rubber left (and their suppliers have run out as well). 4R manufactures two types of river tubes: towable river tubes and free-floating river tubes. Management is wondering which tubes should be produced with the remaining rubber, in order to maximize profits. The following information shows the per-unit information regarding the production and sale of these tubes:TowableFree-floatingPounds of rubber10 lbs. 4 lbs. Direct Materials$65.00 $25.00Direct Labor   $40.00 $20.00Variable Overhead$35.00 $20.00Fixed Overhead$50.00 $30.00Selling price$400.00 $150.00Assume  that  selling  costs  are  negligible  at  this  point,  given  the  current  market  for  river  tubes  and  4R’s  established network. Which type of river tube would be the most profitable for 4R to produce?

Kiran · Accepted Answer

Russian RiverRubber Rafts, (“4R”), is a river tube manufacturing company. Summer is rapidly approaching, and 4R only has 200 pounds of rubber left (and their suppliers have run out as well). 4R manufactures two types of river tubes: towable river tubes and free-floating river tubes. Management is wondering which tubes should be produced with the remaining rubber, in order to maximize profits.

Russian RiverRubber Rafts, (“4R”), is a river tube manufacturing company. Summer is rapidly approaching, and 4R only has 200 pounds of rubber left (and their suppliers have run out as well). 4R...

Solution

Answer To This Question Is Available To Download

Related Questions & Answers

Submit New Assignment