Question
Assume that a company currently produces two models of automotive throttle bodies (Throttle Body A and Throttle Body B). You currently have 9,000 hours of
Assume that a company currently produces two models of automotive throttle bodies (Throttle Body A and Throttle Body B). You currently have 9,000 hours of aluminum casting capacity. Considering the following sales volume demanded, average Selling Price, and Unit Variable Cost characteristics, make a recommendation for the profit-maximizing product mix of Throttle Body A and Throttle Body B (Please use the template provided):
Throttle Body A | Throttle Body B | |
Selling price per unit | $ 16.00 | $ 24.00 |
Variable cost per unit | $ 12.50 | $ 19.00 |
Units per Casting hour | 50 | 20 |
Quantity Demanded | 300,000 | 90,000 |
Template
Data: | ||
Throttle Body A | Throttle Body B | |
Selling price per unit | $ 16.00 | $ 24.00 |
Variable cost per unit | $ 12.50 | $ 19.00 |
Units per Casting Hour | 50 | 20 |
Quantity Demanded | 300,000 | 90,000 |
Total Casting Hours Required to satisfy Demand | ||
Aluminum Casting Capacity = | 9,000 | Hours |
Calculate Profit-maximizing Product Mix: | ||
Throttle Body A | Throttle Body B | |
Contribution Margin per unit | ||
Contribution Margin per Casting Hour | ||
Planned Production Volume | ||
Total Casting Hours Required for Production Volume |
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