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1) 2) Colt Company owns a machine that can produce two specialized products. Production time for Product TLX is three units per hour and for
1) 2)
Colt Company owns a machine that can produce two specialized products. Production time for Product TLX is three units per hour and for Product MTV is four units per hour. The machine's capacity is 2,100 hours per year. Both products are sold to a single customer who has agreed to buy all of the company's output up to a maximum of 3,570 units of Product TLX and 4,030 units of Product MTV. Selling prices and variable costs per unit to produce the products follow. $ per unit Selling price per unit Variable costs per unit Product TLX $13.50 4.05 Product MTV $8.10 4.86 Determine the company's most profitable sales mix and the contribution margin that results from that sales mix. (Round per unit contribution margins to 2 decimal places.) Product TLX Product MTV Contribution margin per unit Contribution margin per production hour Total Product TLX 3,570 Product MTV 4,030 Maximum number of units to be sold Hours required to produce maximum units For Most Profitable Sales Mix Product TLX Product MTV Total Hours dedicated to the production of each product Units produced for most profitable sales mix Contribution margin per unit Total contribution margin Childress Company produces three products, K1, S5, and G9. Each product uses the same type of direct material. K1 uses 3.2 pounds of the material, S5 uses 2.2 pounds of the material, and G9 uses 5.6 pounds of the material. Demand for all products is strong, but only 52,300 pounds of material are available. Information about the selling price per unit and variable cost per unit of each product follows. Selling price Variable costs K1 $142.64 94.00 S5 $111.78 90.00 G91 $206.04 145.00 Calculate the contribution margin per pound for each of the three products. Orders for which product should be produced and filled first, then second, and then third? (Round your answers to 2 decimal places.) Contribution margin per pound Product K1 Product S5 Product G9 Contribution margin per pound Order in which products should be produced and filledStep by Step Solution
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