Homework Answers
| Ans. D | Statement of Comparative Profitability | ||||
| Product A | Product B | Product C | Product D | ||
| Selling price per unit | $110.00 | $200.00 | $300.00 | $240.00 | |
| Less: Variable cost per unit | -$100.00 | -$170.00 | -$250.00 | -$195.00 | |
| Contribution margin per unit | $10.00 | $30.00 | $50.00 | $45.00 | |
| Labor hours per unit | 5 | 10 | 20 | 30 | |
| Contribution per labor hour | $2.00 | $3.00 | $2.50 | $1.50 | |
| Ranking | 3 | 1 | 2 | 4 | |
| *Contribution per labor hour = Contribution margin per unit / Labor hours per unit | |||||
| Products | Units Produced (a) | Labor hours per unit (b) | Labor hours (a*b) | ||
| B | 200 | 10 | 2000 | ||
| C | 300 | 20 | 6000 | ||
| A | 100 | 5 | 500 | ||
| D | 50 | 30 | 1500 | ||
| Maximum labor hours available | 10000 | ||||
| Labor hours for Product D = Total labor hours -( Labor hours for Product B + Labor hours for Product C + Labor hours for Product A) | |||||
| 10000 - (2000 + 6000 + 500) | |||||
| 1500 | |||||
| Maximum units of Product D = Labor hours for Product D / Labor hours per unit | |||||
| 1500 / 30 | |||||
| 50 | |||||
| Ans. E | Statement of Comparative Profitability | ||||
| Product A | Product B | Product C | Product D | ||
| Selling price per unit | $110.00 | $200.00 | $300.00 | $240.00 | |
| Less: Variable cost per unit | -$100.00 | -$170.00 | -$250.00 | -$195.00 | |
| Contribution margin per unit | $10.00 | $30.00 | $50.00 | $45.00 | |
| Machine hours per unit | 10 | 40 | 60 | 50 | |
| Contribution per labor hour | $1.00 | $0.75 | $0.83 | $0.90 | |
| Ranking | 1 | 4 | 3 | 2 | |
| *Contribution per labor hour = Contribution margin per unit / Required no. of labor hours | |||||
| Products | Units Produced (a) | Labor hours per unit (b) | Labor hours (a*b) | ||
| A | 100 | 10 | 1000 | ||
| D | 400 | 50 | 20000 | ||
| C | 300 | 60 | 18000 | ||
| B | 275 | 40 | 11000 | ||
| Maximum machine hours available | 50000 | ||||
| Machine hours for Product B = Total labor hours -( Labor hours for Product A + Labor hours for Product D + Labor hours for Product C) | |||||
| 50000 - (1000 + 20000 + 18000) | |||||
| 11000 | |||||
| Maximum units of Product B = Machine hours for Product B / Machine hours per unit | |||||
| 11000 / 40 | |||||
| 275 | |||||
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XYZ Company produces three products, A, B, and C. XYZ's plant capacity is limited to 230,000 machine hours per year. The following information is available for planning purposes: Product A Product B Product C demand for next year ............. 100,000 units 140,000 units 180,000 units selling price per unit ........... $21 $24 $25 variable costs per unit .......... $16 $17 $21 It takes 0.70 machine hours to produce one unit of Product A; 0.80 machine hours to produce one unit...
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XYZ Company produces three products, A, B, and C. XYZ's plant capacity is limited to 48,000...
XYZ Company produces three products, A, B, and C. XYZ's plant capacity is limited to 48,000 machine hours per year. The following information is available for planning purposes: Product A Product B Product C demand for next year ............. 21,000 units 28,000 units 35,000 units selling price per unit ........... $80 $120 $160 direct material cost per unit .... $24 $ 22 $ 36 direct labor cost per unit ....... $18 $ 50 $ 62 variable overhead cost per unit...
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