Zamzung is a large technological firm that produces, among other things, microchips. The CD division of...
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Zamzung is a large technological firm that produces, among other things, microchips. The CD division of Zamzung produces and sells three types of chips directly to the market: a high-performance chip, Talkalot (TL), and two older products called Talkoften (TO) and Talknot (TN). These three products have the following costs per unit: CD Costs per unit Direct materials Direct labor Manufacturing overhead TN Machine hours per unit $2.00 $3.00 $2.00 $3.00 TO TN Manufacturing overhead in the CD is all allocated fixed costs. All three chips are essentially CPUs that need to be produced using a chip-printing machine with a total capacity of 8,000 machine hours (mhrs) a year. The required machining times per chip are: 0.10 $4.00 $3.00 $1.00 $3.00 $5.00 TL TO 0.20 TL 0.80 The current market price for the TL is $18 per chip with a maximum external demand of 6,000 units per year. The maximum external demand for the TO is 15,000 units and it is sold at $9 per unit. The maximum external demand for TN is 30,000 units and it is sold at $8 per unit. Zamzung is a large technological firm that produces, among other things, microchips. The CD division of Zamzung produces and sells three types of chips directly to the market: a high-performance chip, Talkalot (TL), and two older products called Talkoften (TO) and Talknot (TN). These three products have the following costs per unit: CD Costs per unit Direct materials Direct labor Manufacturing overhead TN Machine hours per unit $2.00 $3.00 $2.00 $3.00 TO TN Manufacturing overhead in the CD is all allocated fixed costs. All three chips are essentially CPUs that need to be produced using a chip-printing machine with a total capacity of 8,000 machine hours (mhrs) a year. The required machining times per chip are: 0.10 $4.00 $3.00 $1.00 $3.00 $5.00 TL TO 0.20 TL 0.80 The current market price for the TL is $18 per chip with a maximum external demand of 6,000 units per year. The maximum external demand for the TO is 15,000 units and it is sold at $9 per unit. The maximum external demand for TN is 30,000 units and it is sold at $8 per unit.
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ANSWER To solve this problem we need to find the optimal product mix that maximizes the total contribution margin for the CD division Given informatio... View the full answer
Related Book For
Managerial Economics A Problem-Solving Approach
ISBN: b00btm8fk0
2nd Edition
Authors: Luke M. Froeb, Brain T. Mccann
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