Question
AA maximum Ltd. manufactures bicycles. Two types of bicycles produced are BWB100 and CSX300. The following data relates to the products. BWB100 CSX300 Selling price
AA maximum Ltd. manufactures bicycles. Two types of bicycles produced are BWB100 and CSX300. The following data relates to the products.
BWB100 | CSX300 | |
Selling price per unit | $560 | $850 |
Direct material | $120 | $160 |
Direct labour | $225 | $450 |
Variable overhead | $12 | $15 |
Variable selling costs | $5 | $8 |
Total variable cost/unit | $362 | $633 |
Highly skilled staff are required to manufacture the bicycles and this is in short supply, thus considered to be a scarce resource. It takes 3 labour hours to produce one BWB100 and 6 labour hours to produce one CSX300.
What is the total contribution margin at the optimal level?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started