Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

4 Edgerron Company is able to produce two products, G and B, with the same machine in its factory. The following informatio available Product G

image text in transcribedimage text in transcribed

4 Edgerron Company is able to produce two products, G and B, with the same machine in its factory. The following informatio available Product G Product B Selling price per unit Variable costs per unit Contribution margin per unit Machine hours to produce 1 unit Maximum unit sales per month $ 140 $ 170 102 $ 68 0.4 hours 1.0 hours $ 85 Skipped 600 units 200 units The company presently operates the machine for a single eight-hour shift for 22 working days each month. Management is about operating the machine for two shifts, which will increase its productivity by another eight hours per day for 22 days p This change would require $8,500 additional fixed costs per month. (Round hours per unit answers to 1 decimal place. En operating losses, if any, as negative values.) 1. Determine the contribution margin per machine hour that each product generates Product G Product B Contribution margin per unit Contribution margin per machine hour Product G Product BB Total Maximum number of units to be sold 600 200 Hours required to produce maximum units 2. How many units of Product G and Product B should the company produce if it continues to operate with only one shift? How much total contribution margin does this mix produce each month? Product G Product B Total Hours dedicated to the production of each product Units produced for most profitable sales mix Contribution margin per unit Total contribution margin - one shift 3. If the company adds another shift, how many units of Product G and Product B should it produce? How much total contribution margin would this mix produce each month? Product G Product B Total Hours dedicated to the production of each product Units produced for most profitable sales mix Contribution margin per unit Total contribution margin - two shifts Product G Product B Total Hours dedicated to the production of each product Units produced for most profitable sales mix Contribution margin per unit Total contribution margin - one shift Skipped 3. If the company adds another shift, how many units of Product G and Product B should it produce? How much total contribution margin would this mix produce each month? Product G Product B Total Hours dedicated to the production of each product Units produced for most profitable sales mix Contribution margin per unit Total contribution margin two shifts 4. Suppose that the company determines that it can increase Product G's maximum sales to 700 units per month by spending $7,500 per month in marketing efforts. Should the company pursue this strategy and the double shift? ProductG Product B Total Hours dedicated to the production of each product Units produced for most profitable sales mix Contribution margin per unit Total contribution margin - two shifts and marketing campaign

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Introduction To Cost Accounting

Authors: Don R. Hansen, Maryanne Mowen, Liming Guan, Mowen/Hansen

1st International Edition

0538749636, 978-0538749633

More Books

Students also viewed these Accounting questions