Answered step by step
Verified Expert Solution
Question
1 Approved Answer
ACOUSTIC VARIABLE COST: $95 SELLING PRICE: $225 ELECTRIC VARIABLE COST: $120 SELLING PRICE: $300 MACHINE TIME: ACOUSTIC: 2 HR ELECTRIC: 3 HR MAX GUITAR SALES
ACOUSTIC
VARIABLE COST: $95
SELLING PRICE: $225
ELECTRIC
VARIABLE COST: $120
SELLING PRICE: $300
MACHINE TIME:
ACOUSTIC: 2 HR
ELECTRIC: 3 HR
MAX GUITAR SALES PER MONTH
ACOUSTIC: 131 GUITARS
ELECTRIC: 65 GUITARS
Tyler Guitars makes acoustic and electric guitars. It is struggling to determine the profitability of each guitar and deciding on which guitar to focus its sales efforts. Tyler currently operates a single 8-hour shift for 22 days per month. The Tableau Dashboard shows data from the recent month. Selling Price & Variable Costs per Guitar Acoustic Variable Cost Selling Price Acoustic Variable Cost: $95 Electric Variable Cost Selling Price $o $50 $100 $150 $200 $250 $300 Machine Hours per Guitar Maximum Guitar Sales per Month 4 hrs. 150 guita... 3 hrs. 125 guita... 100 guita... 2 hrs. 75 guitars 50 guitars 1 hrs. 25 guitars so $50 $100 $150 $200 $250 $300 Machine Hours per Guitar Maximum Guitar Sales per Month 4 hrs 150 guita... 3 hrs 125 guita... 100 guita... 2 hrs. 75 guitars 50 guitars 1 hrs. Acoustic: 131 guitars 25 guitars O hrs. O guitars Acoustic Electric Acoustic Electric tableau 1. The company is considering adding a second 8-hour shift for 22 days each month, which would increase fixed costs by $9,000. (a) Compute the most profitable sales mix for the company if it adds a second shift. (b) Should the company add the second shift? Acoustic Electric Total 0 (a) Hours dedicated to the production of each product Units produced for the most profitable sales mix $ 0 (b) Contribution margin per unit Total contribution margin-two shifts Total contribution margin-one shift Incremental revenue - Change in contribution margin Incremental expense - Change in fixed costs Total incremental income Should the company add another shift? Machine Hours per Guitar Maximum Guitar Sales per Month 4 hrs. 150 guita... 3 hrs. 125 guita... 100 guita... 2 hrs. 75 guitars 50 guitars 1 hrs. Electric: 65 guitars 25 guitars Ohrs. O guitars Acoustic Electric Acoustic Electric **+ableau TO 1. The company is considering adding a second 8-hour shift for 22 days each month, which would increase fixed costs by $9,000. (a) Compute the most profitable sales mix for the company if it adds a second shift. (b) Should the company add the second shift? Acoustic Electric Total 0 (a) Hours dedicated to the production of each product Units produced for the most profitable sales mix (b) $ 0 Contribution margin per unit Total contribution margin-two shifts Total contribution margin-one shift Incremental revenue - Change in contribution margin Incremental expense - Change in fixed costs Total incremental income Should the company add another shift
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