Question

Edgerron Company is able to produce two products, G and B, with the
same machine in its factory. The following information is available.

dgerron Company is able to produce two products, G and B. with the sa ailable. Product G Product B Selling price per unit Variable costs per unit $150 $ 180 60 108 Contribution margin per unit $ 90 S 72 Machine hours to produce 1 unit Maximum unit sales per month 1.0 hours 200 units 0.4 hours 550 units he company presently operates the machine for a single eight-hour shif bout operating the machine for two shifts, which will increase its produc his change would require $9.000 additional fixed costs per month. (Rou operating losses, if any, as negative values.) tion marnin ner machine hour that each product generates

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 for two shifts, which will increase its
productivity by another eight hours per day for 22 days per month.
This change would require $9,000 additional fixed costs per month.
(Round hours per unit answers to 1 decimal place. Enter operating
losses, if any, as negative values.)

please help

Answer 1

1						product G	product B
	Contribution margin per unit					90	72
	machine hours per unit					0.4	1
	contribution margin per machine hour					225	72
						product G	product B	total
	Maximum number of units to be sold					550	200
	hours required to produce maximum units					220	200	420
2)						product G	product B	total
	hours dedicated to the production of each product					176		176
	units produced for most profitable sales mix					440
	contribution margin per unit					90
	total contribution margin - one shift					39600		39,600
3)						product G	product B	total
	hours dedicated to the production of each product					220	132	352
	units produced for most profitable sales mix					550	132
	contribution margin per unit					90	72
	total contribution margin-two shifts					49500	9504	59004
	contribution margin -one shifts							39,600
	change in contribution margin							19,404
	change in fixed costs							9,000
	change in operating income (loss)							10,404
	should the company pursue marketing campaign					yes
4)						product G	product B	total
	hours dedicated to the production of each product					240	112	352
	units produced for most profitable sales mix					600	112
	contribution margin per unit					90	72
	total contribution margin-two shifts & marketing campaogn					54000	8064	62064
	contribution margin -two shifts without marketing ca							59,004
	change in contribution margin							3,060
	Additional marketing costs							8,000
	change in fixed costs							9,000
	change in operating income (loss)							-13,940
	should the company pursue marketing campaign					No