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Question #2 (5 points) Bardo, Inc. produces three products. Data concerning the selling prices and variable costs of the thre
Assume demand for the products was: 300 units of F, 600 units of G, and 400 units of H. Also, assume there is no possibility
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Answer #1
The product which provides maximum contribution margin per unit of constraint should be sold
F G H
Selling Price 50 80 70
Variable costs 40 50 55
Contribution Margin per unit 10 30 15
Milling machine hours per unit 2 5 5
Contribution Margin per Hour 5 6 3
Hence, Product G should be sold
2.Amount to be paid for additional hour = Contribution margin earned per hour i.e. $6
c.The products will be produced in the order of contribution margin per hour
Product Units Hours per unit Total Hours
F 0 2 0
G 480 5 2400
H 0 5 0
Total 2400
i.e. 480 units of G
d.Net Income = 480*30-5,000 = $9,400
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