P26-3B Oral-E Corp.. located in Detroit, Michigan, produces two lines of electric tooth- brushes: deluxe and standard

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P26-3B Oral-E Corp.. located in Detroit, Michigan, produces two lines of electric tooth- brushes: deluxe and standard models. Because Oral-E can sell all the toothbrushes it can pro- duce, the owners are expanding the plant, and they are deciding which product line to emphasize. To make this decision, they assemble the following data. Per Unit Deluxe Toothbrush $50 Standard Toothbrush $30 Sale price.. Variable expenses. 15 12 Contribution margin $35 $18 Contribution margin ratio. 70% 60% After expansion, the factory will have a production capacity of 2.200 machine hours per month. The plant can manufacture either 50 standard electric toothbrushes or 20 deluxe elec- tric toothbrushes per machine hour. Required 1. Identify the constraining factor for Oral-E Corp. 2. Prepare an analysis to show which product line to emphasize.

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Accounting

ISBN: 9780130906991

5th Edition

Authors: Charles T. Horngren, Walter T. Harrison, Linda S. Bamber, Betsy Willis, Becky Jones

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