Question

Question 23 Boylan Company manufactures two products-toaster ovens and bread machines. The following data are available: Not yet answered Marked out of 2.00 P Flag question Bread Toaster Ovens Machines Sales price $70 $170 Variable costs $30 $70 Boylan can manufacture six toaster ovens per machine hour and four bread machines per machine hour. Boylan's production capacity is 1600 machine hours per month. Marketing limitations indicate that Boylan can sell a maximum of 6100 toasters and 4000 bread machines per month. Which product and how many units should the company produce in a month to maximize profits? (Round machine hour per unit to two decimal places and your final answer to the nearest whole dollar.) Select one: O A. 6100 toaster ovens and 2333 bread machines B. 6400 bread machines O C. 3600 toaster ovens and 4000 bread machines O D. 9600 toaster ovens

Answer 1

Answer:

For Question 23:

Contribution margin per unit = Sales price per unit - Varaible costs per unit

Toaster ovens = $70 - $30,

= $40

Bread machines = $170 - $70,

= $100

Contribution margin per machine hour = Contribution margin per unit / Machine hours per unit,

Toaster ovens = $40 / 6 ,

= $6.67,
Bread machines = $100 / 4,

= $25,

Bread machines are produced first as contribution margin per machine hour is more.,

Bread machines = 4,000,

Toaster ovens = [1,600 - (4,000/4)] * 6,

= 3,600

So, Option C 3,600 Toaster Ovens and 4,000 Bread Machines is the Correct Answer.

For Question 24:

The extended formula for ROI is Profit Margin Ratio * Asset turnover ratio

As Return On Assets is also a type of Return on Investment.

Where Return on Assets (ROA) = Profit Margin Ratio * Asset Turover ratio.

So Option A is Correct Answer.

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