Question
In: Accounting
Consider the following production and cost data for two products, Avery and Jack: Product Avery Contribution...
Consider the following production and cost data for two products, Avery and Jack:
Product Avery
Contribution margin per unit $98
Machine minutes needed per unit 7.5 minutes
Current demand for product 3,000 minutes
Product Jack
Contribution margin per unit $124
Machine minutes needed per unit 10 minutes
Current demand for product 3,000 units
A total of 37,500 machine minutes are available each period. What is the largest possible total contribution margin that can be realized each period?
Solutions
Expert Solution
Limited factor = 37,500 machine minutes
|
. |
Avery |
Jack |
|
Contribution margin per unit |
$98 |
$124 |
|
Machine minutes needed per unit |
7.5 mints |
10 mints |
|
Contribution margin per Machine mints |
98/7.5 = 13.07 |
124/10 = 12.4 |
|
Current demand for product |
3,000 |
3,000 |
Highest contribution margin per machine mints from Product Avery, so first preference to this product and produce maximum of 3000 units
Machine mints used by Product Avery to produce 3000 units = 3000 * 7.5 = 22500 mints
Remaining mints are used for product jack
Available mints = 37500 - 22500 = 15000 mints
Using 15000 mints, Product Jack can produce = 15000 / 10 = 1500 units
So, here largest possible total contribution margin that can be realized each period is:
Producing 3000 units of product Avery and 1500 units of Product Jack by realizing contribution margin
|
. |
Avery |
Jack |
|
Units |
3000 |
1500 |
|
contribution margin per units |
98 |
124 |
|
Total contribution margin from each |
$294000 |
$186000 |
Maximum contribution margin total = $294000 + $186000 = $480000
ekkarill92 answered 2 years agoRelated Solutions
Consider the following production and cost data for two products, L and C: Product L Product...
Consider the following production and cost data for two
products, L and C:
Product L
Product C
Contribution margin per unit
$27
$22
Machine-hours needed per unit
3 hours
2 hours
The company can only perform 14,500 machine hours each period,
due to limited skilled labor and there is unlimited demand for each
product. What is the largest possible total contribution margin
that can be realized each period?
Multiple Choice
$145,000
$149,750
$159,500
$174,000
The Red Company makes two products. Cost data for these two products is as follows: Product...
The Red Company makes two products. Cost data for these two
products is as follows:
Product A
Product B
Selling price
$10
$20
Variable costs
7
12
Total annual fixed costs are $840,000. The firm's experience has
been that about 20 percent of unit sales come from product A, 80
percent from B.
The Red Company is taxed at 30%
Required:
a.
Determine the number of units to be sold at the break-even
point.
b.
Determine the number of units...
Murphy’s, Inc. has the following production and cost data for two of its products, Standard and...
Murphy’s, Inc. has the following production and cost data for
two of its products, Standard and Deluxe:
Standard
Deluxe
Contribution margin per unit
$67.62
$37.30
Machine hours needed per unit
2.10
1.00
A total of 80,000 hours is available each period for the production
of the two products. The demand for both products is strong and
Murphy will be able to sell as many of either product as it can
produce. Ignoring qualitative issues, which of the two products
should...
manufactures and sells two products: Product X0 and Product W7. Data concerning the expected production of...
manufactures and sells two products: Product X0 and Product W7.
Data concerning the expected production of each product and the
expected total direct labor-hours (DLHs) required to produce that
output appear below:
Expected Production
Direct Labor-Hours Per Unit
Total
Direct Labor-Hours
Product X0
1,000
5
5,000
Product W7
410
3
1,230
Total direct labor-hours
6,230
The direct labor rate is $20.60 per DLH. The direct materials
cost per unit is $145.50 for Product X0 and $127 for Product
W7.
The...
consider the following data for two products of gitano manufacturing number id units produced product a...
consider the following data for two products of gitano
manufacturing
number id units produced product a 11,500 units product b 1300
units
direct labor cost (@ $27 per DLH) product a 0.14 DLH per unit
product b 0.28 DLH per unit
direct materials cost product a $2 per unit product b $2.50
per unit
machine setup overhead costs $51,176
materials handling $ 55,000
quality control inspections $79,380
total $ 185,556
round to two decimal places
1.
use direct labor hours...
The following data are for the two products produced by Tadros Company. Product A Product...
The following data are for the two products produced by Tadros
Company.
Product A
Product B
Direct materials
$
14 per unit
$
26 per unit
Direct labor hours
0.5 DLH per unit
1.5 DLH per unit
Machine hours
0.4 MH per unit
1.1 MH per unit
Batches
100 batches
200 batches
Volume
10,000 units
2,000 units
Engineering modifications
9 modifications
45 modifications
Number of customers
500 customers
400 customers
Market price
$
34 per unit
$
95...
The following data are for the two products produced by Tadros Company. Product A Product...
The following data are for the two products produced by Tadros
Company.
Product A
Product B
Direct materials
$
14 per unit
$
26 per unit
Direct labor hours
0.5 DLH per
unit
1.5 DLH per
unit
Machine hours
0.4 MH per
unit
1.1 MH per
unit
Batches
100 batches
200 batches
Volume
10,000
units
2,000 units
Engineering modifications
9
modifications
45
modifications
Number of customers
500
customers
400
customers
Market price
$
34 per unit
$
95...
Consider the following data on the quantity of production and its cost (in dollars) for a...
Consider the following data on the
quantity of production and its cost (in dollars) for a particular
customized component, for each of 10 weeks.
NumberProduced
Cost
16
207.17
6
90.93
18
227.22
10
153.61
13
155.97
3
68.24
9
112.00
16
185.77
20
260.48
5
80.62
a. Find the usual
statistical measure for the strength of the association between
cost and number produced. Please give both the name and...
A firm produces two products where marginal cost of production for each product is equal to...
A firm produces two products where marginal cost of production
for each product is equal to $30.
The table below shows the reservation prices of different types
of consumers for each of your product.
Consumer Type
Product 1
Product 2
A
25
100
B
40
80
C
80
40
D
100
25
Consider three alternative pricing strategies (i) only selling
the goods individually (ii) only bundling and (iii) providing both
as a package and individually. For each strategy, determine the...
The following data are for the two products produced by Shakti Company. Product A Product B...
The following data are for the two products produced by Shakti
Company.
Product A
Product B
Direct materials
$
15 per unit
$
24 per unit
Direct labor hours
0.3 DLH per unit
1.6 DLH per unit
Machine hours
0.1 MH per unit
1.2 MH per unit
Batches
125 batches
225 batches
Volume
10,000 units
2,000 units
Engineering modifications
12 modifications
58 modifications
Number of customers
500 customers
400 customers
Market price
$
30 per unit
$
120 per unit...
ADVERTISEMENT
ADVERTISEMENT
Latest Questions
- In the article from Forbes notes that the goal of a leader is not to clone...
- Many people keep time using a 24 hour clock (11 is 11am and 23 is 11pm,...
- UNIX ONLY -- DIFFICULT LAB ASSIGNMENT This is an extremely difficult subject for me. Could you...
- Do you know why your credit card can be refused even though you are profitable?
- The Following Java expression: S/10 * 10 + 10 – S = C Show that this...
- Year Cash Flow 0 −$9,700 1 5,800 2 2,500 3 3,400 &nb
- In a two – story building, an exterior column is to be designed for a service...
ADVERTISEMENT