# Canisters Unlimited (8 Points)The Production Manager At Canisters

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MBA540
Homework Due
Week 2
Canisters Unlimited (8 points)
The production manager at Canisters Unlimited needs to determine which product orders to fill.
He has gathered the following data:
Products
Fixed cost (per week)
Variable cost (per case)
Selling Price (per case)
Fill time per case
(minutes)
Cases ordered (per week) A
\$900
33.00
\$45.00 B
\$240
12.00
\$15.00 C
\$600
45.00
\$60.00 D
\$600
16.00
\$20.00 E
\$3,000
25.00
\$35.00 F
\$1,500
35.00
\$40.00 10
90 4
100 5
50 8
50 3
400 4
200 Assume that is a product is discontinued for the week, that product’s fixed costs are not incurred
during that week.
a) Calculate the break-even volume for products A-F.
Products
Fixed cost (per week)
Variable cost (per case)
Selling Price (per case)
Fill time per case
(minutes)
Cases ordered (per week)
CM /unit
Break-even volume A
\$900
33.00
\$45.00 B
\$240
12.00
\$15.00 C
\$600
45.00
\$60.00 D
\$600
16.00
\$20.00 E
\$3,000
25.00
\$35.00 F
\$1,500
35.00
\$40.00 10
90
45-33=12 4
100
15-12=3 5
50
60-45=15 8
50
20-16=4 900/12=75 240/3=80 600/15=40 600/4=150 3
400
35-25=10
3000/10=30
0 4
200
40-35=5
1500/5=30
0 b) If the plant runs at full capacity (70 hours), which orders can be filled?
c) Due to a machine break-down, the manager estimates that only 40 hours of capacity will be
available. Which products should be manufactured? Carson Distributions (8 points)
Carson Distributions is a successful company selling environmentally friendly equipment
cleaning solutions to companies. Their current sales program rewards salesmen based on case
sales volume, available to both sales personnel and staff. Bonuses are paid monthly. Sales are doing phenomenally due to a small group of employees who go the extra mile. One employee
stated, I love working here. I’m good at what I do and the company rewards me well for the
effort I make. Carson Distributions recently hired a new Human Resources manager who is
contemplating changing the current bonus program to be more directly linked with the
company’s goals. The new bonus structure would pay out yearly, and would be based on the
company’s ability to meet their target profit goals and the employee’s personnel evaluation. The
bonus would be divided equally among all employees in order to encourage a collaborative team
atmosphere. Discuss what you think happened after implementing the new profit sharing