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21. Company X makes three products, which require the use of two types of machinery: cutting and assembling. The following information is available for each
21. Company X makes three products, which require the use of two types of machinery: cutting and assembling. The following information is available for each unit of output for next year: Products A B Selling price (/unit) 50 60 36 Sales demand (units) 2,500 3,400 5,100 Material cost (/unit) 24 26 20 Variable production cost (/unit) 14 8 6 1 1 0.5 Time required per unit on cutting machines Time required per unit on assembling 0.5 1 0.5 Fixed overheads for next year are expected to be 84,000. It is the business' policy for each product to absorb these in proportion to its variable costs. Company X has cutting machine capacity of 6,800 hours a year and assembling machine capacity of 8,000 hours a year. What is the maximum contribution that Company X can generate if it is operating in its optimal production capacity? A. $52,560 B. $118,400 C. $149,600 D. $200,600 22. In 2018, Company Y produced 200,000 pedometers and sold for $6m. The variable costs of production were each $10.50. Company Y made a $690,000 loss. Assuming there is no change in any cost or revenue behavior, how many pedometers must be made and sold to make a profit of $900,000 in the same year? A. 164,616 B. 250,000 C. 281,539 D. 312,308 23. Company Y produced and sold 200,000 units of its product in 2018 for 15 each. You are given the following information: Fixed costs: Variable costs: $360,000 $12/unit What is the margin of safety? A. 11.1% B. 25.0% C. 40.0% D. 66.7%
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