a.
Small | Deluxe | Big | ||
Selling Price per unit | A | $ 180 | $ 360 | $ 255 |
Variable cost per unit | B | $ 60 | $ 100 | $ 55 |
Contribution per unit | A - B | $ 120 | $ 260 | $ 200 |
Machine time per unit | C | 4 minutes | 13 minutes | 8 minutes |
Qty required per unit | 24 kg | 10 kg | 16 kg | |
Contribution per minute of machine time | (A - B) / C | $ 30 | $ 20 | $ 25 |
Rank | 1 | 3 | 2 | |
b.
Small | Deluxe | Big | ||
Selling Price per unit | A | $ 180 | $ 360 | $ 255 |
Variable cost per unit | B | $ 60 | $ 100 | $ 55 |
Contribution per unit | A - B | $ 120 | $ 260 | $ 200 |
Qty required per unit | C | 24 kg | 10 kg | 16 kg |
Contribution per KG of material | (A - B) / C | $ 5 | $ 26 | $ 12.50 |
Rank | 3 | 1 | 2 | |
c.
Deluxe has the largest unit contribution margin.
d.
The product with the largest unit contribution margin has the
largest contribution if we see it as a unit of output. But if we
evaluate it as inputs and break it down we find that it takes the
maximum machine time per unit. So even though it has the largest
unit contribution the same is spread over a larger time to
calculate per minute contribution. In case of Qty of plastic
material. it consumes the lowest, so here it gives the best
ranking.
4:37 PM 4:37 PM Question 4 (7 Marks Hce Compuny is manufacing pcial sge ostai peplar...
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