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Assume that a car manufacturer produces only four types cars: Model X, Model y, Roadster, and Speedster. A limitation of 1,580 microprocessors per week prevents
Assume that a car manufacturer produces only four types cars: Model X, Model y, Roadster, and Speedster. A limitation of 1,580 microprocessors per week prevents the manufacturer from meeting sales demand for these cars. The product information is presented below:
Model X | Model Y | Roadster | Speedster | |||
Unit Selling Price | 35,750 | 43,500 | 65,000 | 89,125 | ||
Unit Variable Cost | (18,750) | (25,675) | (36,540) | (61,225) | ||
Contribution Margin | 17,000 | 17,825 | 28,460 | 27,900 | ||
Microprocessors per car | 20 | 25 | 32 | 50 |
Required | ||||||
1. Determine the weekly contribution from each product when microprocessors are allocated to the product with the highest: | ||||||
a. | Unit selling price | |||||
b. | Unit contribution margin | |||||
c. | Contribution per microprocessor | |||||
2. Determine the net disadvantage to the manufacturer if management requires the weekly production of 12 Speedsters. | ||||||
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Step: 1
Answer allocates all available microprocessors to the product with the highest unit selling price To determine the weekly contribution from each product we need to calculate the contribution margin fo...Get Instant Access to Expert-Tailored Solutions
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Step: 2
Step: 3
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