Solution
1.
Product G | Product B | ||
Contribution margin per unit | $60 | $48 | |
Machine hours per unit | 0.4 |
1.0 |
|
Contribution margin per machine hour |
$150 (60/.4) |
$48 (48/1) |
|
Product G | Product B | Total | |
Maximum number of units to be sold | 600 | 200 | |
Hours required to produce maximum units |
240 (600×.4) |
200 (200×1) |
440 |
2.
Product G | Product B | Total | |
Hours dedicated to the production of each product |
176 (22 days×8 hours) |
||
Units produced for most profitable sales mix |
440 (176/.4) |
||
Contribution margin per unit | $60 | ||
Total contribution margin -one shift | $26,400 |
3.
Product G | Product B | Total | |
Hours dedicated to the production of each product |
240 hours |
112 hours (352-240) |
352 hours (176×2) |
Units produced for most profitable sales mix | 600 | 112 | |
Contribution margin per unit | $60 | $48 | |
Total contribution margin two shift | $36000 | $5,376 | $41,376 |
Total contribution margin-one shift | $26,400 | ||
Change in contribution margin | $14,976 | ||
Change in fixed costs | $6,000 | ||
change in operating income(loss) | $8,976 | ||
Should the company add another shift | yes |
4.
Product G | Product B | Total | |
Hours dedicated to the production of each product |
280 hours (700×.4) |
72 hours (352-280) |
352 hours (176×2) |
Units produced for most profitable sales mix | 700 | 72 | |
Contribution margin per unit | $60 | $48 | |
Total contribution margin two shift and marketing campaign | $42000 | $3,456 | $45,456 |
Total contribution margin-two shift without marketing campaign | $41,376 | ||
Change in contribution margin | $4,080 | ||
Change in fixed costs | $6,000 | ||
Additional marketing costs | $5,000 | ||
change in operating income(loss) | $(6,980) | ||
Should the company pursue marketing change | no |
.
Edgerron Company is able to produce two products, G and B, with the same machine in its factory. The following information is available Product G Product B 120 72 Selling price per unit Variable cost...
Edgerron Company is able to produce two products, G and B, with the same machine in its factory. The following information is available. Product G Product B Selling price per unit $ 90 $ 120 Variable costs per unit 30 72 Contribution margin per unit $ 60 $ 48 Machine hours to produce 1 unit 0.4 hours 1.0 hours Maximum unit sales per month 600 units 200 units The company presently operates the machine for a single eight-hour...
Edgerron Company is able to produce two products, G and B, with the same machine in its factory. The following information is available. Product G $ 180 75 Selling price per unit Variable costs per unit Contribution margin per unit Machine hours to produce 1 unit Maximum unit sales per month Product B $ 210 126 $ 84 $ 105 0.4 hours 1.0 hours 600 units 200 units The company presently operates the machine for a single eight-hour shift for...
Edgerron Company is able to produce two products, G and B, with the same machine in its factory. The following information is available Selling price per unit Variable costs per unit Contribution margin per unit Machine hours to produce 1 unit Maximum unit sales per month Product G $150 60 $ 90 0.4 hours 550 units Product B $ 180 108 $ 72 1.0 hours 200 units The company presently operates the machine for a single eight-hour shift for 22...
Edgerron Company is able to produce two products, G and B, with the same machine in its factory. The following information is available. Selling price per unit Variable costs per unit Contribution margin per unit Machine hours to produce 1 unit Maximum unit sales per month Product G $ 50 10 $ 40 Product B $ 80 48 $ 32 1.0 hours 200 units 0.4 hours 600 units The company presently operates the machine for a single eight-hour shift for...
Edgerron Company is able to produce two products, G and B, with the same machine in its factory. The following information is available. Product G $ 150 Product B $ 180 - 60 108 Selling price per unit Variable costs per unit Contribution margin per unit Machine hours to produce 1 unit Maximum unit sales per month $ 90 0.4 hours 550 units $ 72 1.0 hours 200 units The company presently operates the machine for a single eight-hour shift...
Edgerron Company is able to produce two products, G and B, with the same machine in its factory. The following information is available. Selling price per unit Variable costs per unit Product G $ 190 80 Product B $ 220 132 Contribution margin per unit $ 110 $ 88 0 unit Machine hours to produce 1 unit Maximum unit sales per month 0.4 hours 550 units 1.0 hours 200 units The company presently operates the machine for a single eight-hour...
Edgerron Company is able to produce two products, G and B, with the same machine in its factory. The following information is available. Selling price per unit Variable costs per unit Contribution margin per unit Machine hours to produce 1 unit Maximum unit sales per month Product G $ 80 25 $ 55 0.4 hours 600 units Product B $ 110 66 $ 44 1.0 hours 200 units The company presently operates the machine for a single eight-hour shift for...
Edgerron Company is able to produce two products, G and B, with the same machine in its factory. The following information is available Product G $ 180 Product B $ 210 Selling price per unit Variable costs per unit Contribution margin per unit Machine hours to produce 1 unit Maximum unit sales per month $ 105 S 84 0.4 hours 550 units 1.9 hours 200 units The company presently operates the machine for a single eight-hour shift for 22 working...
Edgerron Company is able to produce two products, G and B, with the same machine in its factory. The following information is available. Selling price per unit Variable costs per unit Contribution margin per unit Machine hours to produce 1 unit Maximum unit sales per month Product G $ 140 55 $ 85 Product B $ 170 102 $ 68 0.4 hours 500 units 1.0 hours 200 units The company presently operates the machine for a single eight-hour shift for...
Edgerron Company is able to produce two products, G and B, with the same machine in its factory. The following information is available. Product GProduct BSelling price per unit $90 $120 Variable costs per unit 30 72 Contribution margin per unit $60 $48 Machine hours to produce 1 unit0.4hours 1.0hours Maximum unit sales per month600units 200units The company presently operates the machine for a single eight-hour shift for 22 working days each month. Management is thinking about operating the machine...