Question

Check my wol Exercise 23-6 Sales mix determination and analysis LO P3 points Colt Company owns a machine that can produce two specialized products. Production time for Product TLX is tv units per hour and for Product MTV is four units per hour. The machine's capacity is 2,500 hours per year. Both products are sold to a single customer who has agreed to buy all of the company's output up to a maximum of 4,250 units of Product TLX and 1,930 units of Product MTV. Selling prices and variable costs per unit to produce the products follow. eBook Hint $ per unit Selling price per unit Variable costs per unit Product TLX $11.50 3.45 Product MTV $6.90 4.14 Print References Determine the company's most profitable sales mix and the contribution margin that results from that sales mix. (Round per unit contribution margins to 2 decimal places.)

Answer 1

Product TLX Product MTV 8.05 $ Contribution margin per unit Units produced per hour Contribution margin per produced hour $ 2.76 2 4 4.03$ $ 0.69 Product TLX Product MTV Total Maximum number of units to be sold 4250 1930 Hours Required to produce maximum units 482.5 2125 2607.5 Product TLX Product MTV Total For Most Profitable sales mix Hours dedicated to production of each product 2125 375 2500 Units produced for most profitable mix Contribution margin per unit Total contribution margin 1500 4250 4.03$ 0.69 17,127.50 $ 1,035.00 $ 18,162.50 Note Round off as per system requirement