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#9 Newd help fixing Edge Company produces two models of its product with the same machine. The machine has a capacity of 176 hours per
#9 Newd help fixing
Edge Company produces two models of its product with the same machine. The machine has a capacity of 176 hours per month. The following information is available. Standard $ 120 40 $ 80 Deluxe $ 160 90 Selling price per unit Variable costs per unit Contribution margin per unit Machine hours per unit Maximum unit sales per month $ 70 1 hour 600 units 2 hours 200 units Required: Answer is not complete. 1. Determine the contribution margin per machine hour for each model. Product Contribution Margin Standard Contribution margin per unit $ 80 Deluxe 70 1 Contribution margin per machine hour 80 35 2. How many units of each model should the company produce? How much total contribution margin does this mix produce per month? Standard Deluxe Total 176 176 176 0 Hours dedicated to the production of each product Units produced for most profitable sales mix Contribution margin per unit Total contribution margin 80 70 S 14,080 0 14,080 | Hours dedicated to the production of each product 176 176 Units produced for most profitable sales mix 176 80 70 Contribution margin per unit Total contribution margin $ 14,080 $ 0 $ 14,080 3. Assume the maximum demand for the Standard model is 100 units (not 600 units). How many units of each model should the company produce? How much total contribution margin does this mix produce per month? Standard Deluxe Total 100 76 176 Hours dedicated to the production of each product Units produced for most profitable sales mix Contribution margin per unit 100 38 $ 80 70 $ $ Total contribution margin $ 8,000 2,660 $ 9,330
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