Vancouver, BC, Glide Ltd Case Study - Report Writing - Accounting and Finance Assignment Help

Assignment Task:

Based in Vancouver, BC, Glide Ltd. is a manufacturer of snowboards for the Canadian market. It has two models: the “FreeRide” and the “FreeStyle”. Glide is attempting to determine how many units should be manufactured of each model for the upcoming winter season. Glide can sell each FreeRide model for $500 and each FreeStyle model for $350 wholesale.  The variable production cost for FreeRide is $325 and for FreeStyle it is $200. The production volume for FreeRide cannot exceed 2,000 units and FreeStyle cannot exceed 1,000 units. It takes 16 hours to manufacture each FreeRide board and 10 hours to manufacture each FreeStyle board. Glide has factory capacity of 20,000 hours and Fixed OH of $100,000.

REQUIRED:

1. As the firm’s Management Accountant, formulate the full linear program decision-model that will help them understand the optimal Contribution Margin for the snowboards next year

2. A competitor has informed you that due to the economic downturn they have available capacity hours in the factory that they wish to rent out by the hour as an attempt to recover their fixed costs. Using the data from Exhibit 1, what is the total maximum dollars Glide would be willing to pay for 1,500 additional hours of capacity and hot harm its optimal Contribution Margin?

3. Using the data from Exhibit 1, if the Margin for FreeStylewas actually $110/unit rather than $150/unit, what results would remain unchanged? What results would change in Exhibit 1, and by how much?  

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