Question
In: Accounting
AHH! Corporation has three product lines with limited demand. The firm has NO fixed costs. Below...
AHH! Corporation has three product lines with limited demand. The firm has NO fixed costs. Below are some facts about the firm. Oh! No! Way! Monthly demand (units) 100 120 140 Machine hours per unit 3 6 8 Price per unit $70 $75 $80 Variable costs per unit $60 $62 $60 The firm can only supply 1,800 hours of machine time per month between the three product lines. What is the firm's maximum monthly profit? Selected Answer: c. $4,300 Answers: a. $5,560 b. $4,510 c. $4,300 d. $4,650
Solutions
Expert Solution
Correct answer-------$4,650
The answer by the given below calculation is $4,623 which is closest to Option d
Working
| Statement of ranking indicating which product to produced first, second and third | |||
| Product | |||
| Oh | No | Way | |
| Sales price per unit | $ 70.00 | $ 75.00 | $ 80.00 |
| Variable cost per unit | $ 60.00 | $ 62.00 | $ 60.00 |
| Contribution margin per unit | $ 10.00 | $ 13.00 | $ 20.00 |
| Machine hours per unit | 3.00 | 6.00 | 8.00 |
| Contribution margin per machine hour | $ 3.33 | $ 2.17 | $ 2.50 |
| Ranking | I | III | II |
| Statement of Optimum mix | |||
| Product | Units to be Produced | Machine hours per unit | Machine hours consumed |
| Oh | 100 | 3.00 | 300.00 |
| No | 63 | 6.00 | 380.00 |
| Way | 140 | 8.00 | 1120.00 |
| Maximum Quantity | 1800.00 | ||
| Units | Contribution per unit | Total Contribution | |
| Oh | 100.00 | $ 10.00 | $ 1,000 |
| No | 63.33 | $ 13.00 | $ 823 |
| Way | 140.00 | $ 20.00 | $ 2,800 |
| Total | $ 4,623 | ||
ekkarill92 answered 3 months agoRelated Solutions
Generic Motors Corporation has two product lines, A and B. Its revenue and costs for last...
Generic Motors Corporation has two product lines, A and B. Its
revenue and costs for last year is as follows:
Product A
Product B
Total
sales volume (units)
100
200
300
Revenue
$6,000
$30,000
$36,000
Costs:
direct
materials
$1,200
$6,000
$7,200
direct labor
$3,000
$12,000
$15,000
OH costs
$11,700
Profit
$2,100
Generic Motors uses ABC to allocate the overhead costs. It
examined the main activities in the firm, and decided to break up
the total overhead costs of $11,700 into...
Firm XYZ has fixed indirect costs of £100,000,000. The firm produces 1,000,000 units of product ABC....
Firm XYZ has fixed indirect costs of £100,000,000. The firm
produces 1,000,000 units of product ABC. Additionally, for each
unit produced, £50 of variable indirect costs are also incurred.
Further, each unit produced consumes 2 direct labour hours, 5
machine hours and £20 of direct materials. The cost of 1 labour
hour is £12.50 and it costs £5 per hour to run the machines. The
firm also manufactures other products. In total it spends
£75,000,000 on direct labour and £125,000,000...
Beech Corporation has three finished products (related to three different product lines) in its ending inventory...
Beech Corporation has three finished products (related to three
different product lines) in its ending inventory at December 31,
Year 1. The following table provides additional information about
each product:
Product
Cost
Replacement Cost
Selling Price
Normal Profit Margin
101
$130
$140
$160
20%
202
$160
$135
$140
20%
303
$100
$80
$100
15%
Breech Corporation expects to incur selling costs to 5% of the
selling price on each of the products.
Required: Determine the amount of at which Breech...
A product is currently made by a firm to supply the market, where fixed costs are...
A product is currently made by a firm to supply the market,
where fixed costs are $8,000 per month and variable cost is $50 per
unit. The firm sells the product for $100 per unit.
What is the break-even point in units for this operation? (5
points)
At the break-even production level calculated above, what is
the profit or loss? (5 points)
What is the profit (or loss) if the market demand is 140 units
for a certain month and...
5. Gatewood Hills Corporation has three products X, Y, and Z. The company’s fixed costs are...
5. Gatewood Hills Corporation has three products X, Y, and Z.
The company’s fixed costs are $69,000. The sales mix for its
products are 3 units of X, 4 units of Y, and 1 unit of Z.
Information about the three products follows:
X
Y
Z
Projected sales in dollars
$192,000
$192,000
$64,000
Selling price per unit
$40
$30
$40
Contribution margin ratio
30%
35%
35%
Calculate the company's break-even point in composite units and
sales dollars. (Hint: You will...
Classify the costs below as: Product-Direct, Product-Indirect, or Period AND Variable cost, Fixed cost, or Mixed...
Classify the costs below as: Product-Direct, Product-Indirect,
or Period AND Variable cost, Fixed cost, or Mixed
cost. Below are budgeted income statements at different
team levels, use the information to answer the questions below:
Number of Teams
15
25
30
Product Direct, Product Indirect or Period
Fixed/
Variable
Sales
$1,500
$2,500
$3,000
Cost of Goods Sold
Direct
Materials
75
125
150
Direct
Labor
150
250
300
Applied
Overhead
575
625
650
Gross Profit
$700
$1,500
$1,900
Selling...
Classify the costs below as: Product-Direct, Product-Indirect, or Period AND Variable cost, Fixed cost, or Mixed...
Classify the costs below as: Product-Direct, Product-Indirect,
or Period AND Variable cost, Fixed cost, or Mixed
cost. Below are budgeted income statements at different
team levels, use the information to answer the questions below:
Number of Teams
15
25
30
Product Direct, Product Indirect or Period
Fixed/
Variable
Sales
$1,500
$2,500
$3,000
Cost of Goods Sold
Direct
Materials
75
125
150
Direct
Labor
150
250
300
Applied
Overhead
575
625
650
Gross Profit
$700
$1,500
$1,900
Selling...
A perfectly competitive firm has the following fixed and variable costs in the short run. The market price for the firm’s product is $150.
A perfectly competitive
firm has the following fixed and variable costs in the short run.
The market price for the firm’s product is $150.Complete the table.OutputFCVCTCMCTRMRProfit/Loss0$100$01100100210018031003004100440 5100600 6100780 At what output rate does the firm maximize profit or
minimize loss?What is the firm’s marginal revenue at each positive
level of output? Its average revenue?What can you say about the relationship between marginal
revenue and marginal cost for output rates below the profit
–maximizing (or loss minimizing) rate? For output rates above the
profit...
Miller Corporation is a manufacturer with four product lines. Below is some financial information about each...
Miller Corporation is a manufacturer with four product lines.
Below is some financial information about each of the four product
lines.
Product Segment
Booyas
Widgets
Humdrums
Loonies
Total
Sales to nonaffiliates
$10,000
$30,000
$35,000
$15,000
$90,000
Intersegment sales
2,000
6,000
8,000
16,000
32,000
Total revenue
$12,000
$36,000
$43,000
$31,000
$122,000
Operating profit (loss)
1,000
6,000
(1,000)
8,000
14,000
Identifiable assets
10,000
15,000
60,000
80,000
165,000
Using all the tests below, determine which of the product segments
are reportable...
If a firm has fixed costs of $45,000, a price of $9.00, and a breakeven point...
If a firm has fixed costs of $45,000, a price of $9.00, and a
breakeven point of 22,500 units, the variable cost per unit is:
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- A labor market has 50,000 people in the labor force. Each month, a fraction p of...
- A road with a radius of 72 m is banked so that a car can navigate...
- 1) If you had not dried the solid, would the calculated percent yield have been higher,...
- Two structures of alanine can be drawn that have a net charge of zero, but the...
- Co(II) was used as an internal standard to analyze a sample of Ti(IV) with atomic absorption...
- Matlab Programming Write an M-file to read a real-valued vector of any length from the keyboard...
- TASK back to top In the contemporary management environment, mergers and acquisitions are hot topics; particularly...
ADVERTISEMENT