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A US manufacturer that normally makes handbags has also been making PPE during the pandemic. The company uses machine hours at its factory and has

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A US manufacturer that normally makes handbags has also been making PPE during the pandemic. The company uses machine hours at its factory and has a quarterly capacity of 5,000 machine hours. Product line data for the third quarter (3 months ended September 30, 2020) is below: Handbags PPE Total Revenues 1,100,000 500,000 1,600,000 Variable costs 572.000 220,000 792,000 Contribution margin 528,000 280,000 808,000 Fixed costs (allocated) 75,000 50,000 125,000 Operating income 453,000 230,000 683,000 Machine-hours 4,000 1,000 5,000 required The company is anticipating demand to double for PPE for the fourth quarter (Q4) with the demand remaining the same for the handbags. Assume that fixed costs will remain unchanged in the fourth quarter regardless of the product line that the company decides to prioritize, and that the company is unable to expand capacity of machine hours available at this time. 1. Calculate the contribution margin per machine hour for the handbags product line for the third quarter (Q3). Provide this amount in the first box below. 2. Calculate the contribution margin per machine hour for the PPE product line for Q3. Provide this amount in the second box below. 3. Calculate the expected operating income for the company as a whole for Q4, assuming the company decides to take on the additional PPE work and reduce work on handbags for Q4 as a result. Provide this amount in the third box below. >

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