Question

Homework: ADMN3121 - Lab #02 (Fall20) Save Score: 0 of 22 pts 3 of 3 (1 complete) HW Score: 0%, 0 of 108 pt Exercise 11-26 (alt1) Show Work Question Help Hernon Company produces three products: A130, B324, and C587. All three products use the same direct material, Brac. Unit data for the three products are in the provided table. B (Click to view the unit data for the three products.) The demand for the products far exceeds the direct materials available to produce the products. Brac costs $7 per pound, and a maximum of 5,400 pounds is available each month. Hernon must produce a minimum of 210 units of each product. Required Х Unit data for the three products Requirement 1. How many units of product A130, B324, and C587 should Hernon produce? (Round to the near Hernon should produce units of A130. Product A130 B324 C587 x Required Selling price $ 248 $ 155 $ 212 Variable Costs Direct Materials $ 66 $ 39 $ 25 $ Labour and other costs 76 Enter your answer in $ 82 $ 116 1. How many units of product A130, B324, and C587 should Hernon produce? 2. What is the maximum amount Hernon would be willing to pay for another 1,260 pounds of Brac? Quantity of Brac 10 lb. 4 lb. 4 lb. 3 parts remaining

Answer 1

	A130	B324	C587
Selling Price	$            248.00	$            155.00	$            212.00
Less Variable Costs	$            142.00	$            121.00	$            141.00
Contribution Margin per unit	$            106.00	$              34.00	$              71.00
Quantity of Brac per unit	10	4	4
Contribution Margin per lbs	$              10.60	$                 8.50	$              17.75

	A130	B324	C587	Total
Quantity used for Minimum Production of 210 units	2100	840	840	3780

Remaining 1620 pounds should be used for C587 since it has highest contribution margin per lbs

1.
Quantity to be produced
A310 = 210 units
B324 = 210 units
C587 = 210 + 1620/4 = 615 units

2.
Maximum to be paid is $17.75 per pound

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