PRODUCT 1 PRODUCT 2 Demand 80 80 Time/Unit 30 20 Sale Price 50 30 Variable Cost/Unit...

PRODUCT 1		PRODUCT 2
Demand	80		80
Time/Unit	30		20
Sale Price	50		30
Variable Cost/Unit	10		5
Contribution Margin/Unit	40		25
Contribution Margin Ratio	60%		40%
Contribution Margin/Unit of Time	0.33		0.50

Assume the maximum time allowed is only 3,900 per day.
Calculate and compare the profitability of the following scenarios:
I. The product with the highest contribution margin prioritized.
II. The product with the highest contribution margin per unit of constrained resource is prioritized.
B
How do managers ensure the optimal usage of constrained resources?

Solutions

Expert Solution

ekkarill92 answered 1 year ago

Next > < Previous

Related Solutions

Question. Currently the unit selling price of a product is $200, the unit variable cost is...

Question. Currently the unit selling price of a product is $200, the unit variable cost is $110, and the total fixed costs are $585,000. A proposal is being evaluated to increase the unit selling price to $275. Under the proposed plan, the variable cost per unit and the total fixed cost will not change. Current Scenario [7 Points]: 1) Calculate the contribution margin per unit. 2) Calculate the contribution margin ratio. 3) Calculate the breakeven point in units under the...

Currently, the unit selling price of a product is $7,520, the unit variable cost is $4,400,...

Currently, the unit selling price of a product is $7,520, the unit variable cost is $4,400, and the total fixed costs are $23,400,000. A proposal is being evaluated to increase the unit selling price to $8,000. a. Compute the current break-even sales (units). _____________ units b. Compute the anticipated break-even sales (units), assuming that the unit selling price is increased and all costs remain constant. _______________units

If Company A’s selling price of its product is $1,000, variable cost is 80% of the...

If Company A’s selling price of its product is $1,000, variable cost is 80% of the selling price, and fixed cost is $100,000. What will be the total sales in dollars and units for the company to break even? Also, what is sales mix and what role does contribution margin play when a company is evaluating it’s sales mix?

Given the following Selling Price: 50$ per unit Variable Cost: 40$ per unit Fixed Cost: 80,000$...

Given the following Selling Price: 50$ per unit Variable Cost: 40$ per unit Fixed Cost: 80,000$ per unit Calculate: A. Contribution margin as well as the contribution margin ratio B. Profit(loss) if 7,200 units are sold C. Margin of safety if 10,100 units are sold D. Break even point in dollars

DATE TRANSACTION # Units Price/Unit June 1 Beginning Inventory 50 $102 June 5 Sale 30 June...

DATE TRANSACTION # Units Price/Unit June 1 Beginning Inventory 50 $102 June 5 Sale 30 June 10 Purchase 100 $110 June 17 Sale 60 June 30 Ending Inventory 60 July 2 Purchase 100 $108 July 8 Sale 110 July 14 Purchase 50 $112 July 18 Sale 40 July 22 Purchase 60 $117 July 26 Sale 50 July 31 Ending Inventory 70 1. Assuming perpetual inventory and LIFO, what is COGS in June? 2. Assuming perpetual inventory and average cost, what...

Break-Even Sales Currently, the unit selling price of a product is $380, the unit variable cost...

Break-Even Sales Currently, the unit selling price of a product is $380, the unit variable cost is $310, and the total fixed costs are $1,001,000. A proposal is being evaluated to increase the unit selling price to $420. a. Compute the current break-even sales (units). units b. Compute the anticipated break-even sales (units), assuming that the unit selling price is increased and all costs remain constant. units

Exhibit 2 Quantity Sold Price (units) Total Cost $10 10 $80 9 20 100 8 30...

Exhibit 2 Quantity Sold Price (units) Total Cost $10 10 $80 9 20 100 8 30 130 7 40 170 6 50 230 5 60 300 4 70 380 A single-price monopolist is a monopolist that sells each unit of its output for the same price to all its customers. Refer to Exhibit 2. A single-price monopolist that seeks to maximize profits will sell __________ units and charge a per-unit price of __________. Group of answer choices 20; $9 40;...

Product Unit cost Cost Price Date Product Unit Sales (report 2 numbers after decimal place) A1...

Product Unit cost Cost Price Date Product Unit Sales (report 2 numbers after decimal place) A1 56 61.6 1/1/2010 A2 3 Question 3 What is the total cost of good sold in 1/2/2010 A2 16 17.6 1/1/2010 A3 6 A3 90 99 1/1/2010 A22 5 A4 67 73.7 1/1/2010 A52 32 Question 4 What is the total sales in 1/3/2010 A5 29 31.9 1/1/2010 A7 60 A6 11 12.1 1/1/2010 A18 98 A7 5 5.5 1/1/2010 A32 96 Question 5...

Currently, the unit selling price of a product is $310, the unit variable cost is $250, and the total fixed costs are $918,000.

Currently, the unit selling price of a product is $310, the unit variable cost is $250, and the total fixed costs are $918,000. A proposal is being evaluated to increase the unit selling price to $340. a. Compute the current break-even sales (units).units b. Compute the anticipated break-even sales (units), assuming that the unit selling price is increased and all costs remain constant.units Break-Even Sales and Sales to Realize Income from Operations For the current year ended October 31,...

___ 1. Lester Company has a single product. The selling price is $50 and the variable...

___ 1. Lester Company has a single product. The selling price is $50 and the variable cost is $30 per unit. The company’s fixed expenses are $200,000 per month. What is the company’s unit contribution mar- gin? a) $50; b) $30; c) $20; d) $80. ___ 2. Refer to the data for Lester Company in question 1 above. What is the company’s contribution margin ratio? a) 0.60; b) 0.40; c) 1.67; d) 20.00. ___ 3. Refer to the data for...

Subjects