Bb WE & co 5 X 30 (1 20 42 30 (1 20 (6 3 ac M Int G Go & ac Bb En O ME GA( if - G w ww M coif H & co 5 C: 5 w & B + C A ezto.mheducation.com/ext/map/index.html?_con=con&external_browser=0&launchUrl=https%253A%252F%252Fnewconnect.mheducation.com%252F#/a.. Ch 10 HW - ACG3073 Saved Help Save & Exit Submit Check my work 12 Edgerron Company is able to produce two products, G and B, with the same machine in its factory. The following information is available. 15 Product G Product B points Selling price per unit $ 110 $ 140 Variable costs per unit 40 84 Contribution margin per unit $ 70 $ 56 eBook Machine hours to produce 1 unit 0 . 4 hours 1.0 hours Maximum unit sales per month 500 units 250 units Print References The company presently operates the machine for a single eight-hour shift for 22 working days each month. Management is thinking about operating the machine for two shifts, which will increase its productivity by another eight hours per day for 22 days per month. This change would require $7,000 additional fixed costs per month. (Round hours per unit answers to 1 decimal place. Enter operating losses, if any, as negative values.) 1. Determine the contribution margin per machine hour that each product generates. Product G Product B Contribution margin per unit $ 70.00 $ 56.00 Machine hours per unit 0.4 1.0 Contribution margin per machine hour $ 175.00 $ 56.00 Product G Product B Tota Maximum number of units to be sold 500 250 Hours required to produce maximum units 200 250 450 2. How many units of Product G and Product B should the company produce if it continues to operate with only one shift? How much total contribution marin does this mix neduce each month? Mc Graw Bb WE & co 5 X 30 (1 30 4 20 (1 20 (61 3 ac M Int G Go S ac Bb Er Q ME GA( if - G w ww M coif |& co 5 6 5 w & B + C A ezto.mheducation.com/ext/map/index.html?_con=con&external_browser=0&launchUrl=https%253A%252F%252Fnewconnect.mheducation.com%252F#/a... Ch 10 HW - ACG3073 Saved Help Save & Exit Submit Check my work mode : This shows what is correct or incorrect for the work you have completed so far. It does not indicate completion. Return to question 12 2. How many units of Product G and Product B should the company produce if it continues to operate with only one shift? How much total contribution margin does this mix produce each month? Product G Product B Total 15 Hours dedicated to the production of each product 176 176 points Units produced for most profitable sales mix 440 Contribution margin per unit 70.00 $ 0.00 Total contribution margin - one shift 30,800 3. If the company adds another shift, how many units of Product G and Product B should it produce? How much total incremental income would this mix produce each month? Should the company add the new shift? Product G Product B Total Hours dedicated to the production of each product 200 200 Units produced for most profitable sales mix 500 Contribution margin per unit 70.00 Total contribution margin - two shifts 35,000 Total incremental income Mc Graw Bb WE & co 5 X 30 (1 30 4 20 (1 20 (61 3 ac M Int G Go S ac Bb Er Q ME GA( if - G w ww M coif |& co 5 6 5 w & B + C A ezto.mheducation.com/ext/map/index.html?_con=con&external_browser=0&launchUrl=https%253A%252F%252Fnewconnect.mheducation.com%252F#/a... Ch 10 HW - ACG3073 Saved Help Save & Exit Submit Check my work mode : This shows what is correct or incorrect for the work you have completed so far. It does not indicate completion. Return to question 12 4. Suppose the company determines that it can increase Product G's maximum sales to 600 units per month by spending $6,000 per month in marketing efforts. Should the company pursue this strategy and the double shift? Compute total incremental income. Product G Product B Total 15 points Second shift without marketing campaign: Units produced for most profitable sales mix 240 X Contribution margin per unit 70.00 Contribution margin 16,800 $ 0 Second shift with marketing campaign: Units produced for most profitable sales mix 30800 X 112 Contribution margin per unit 70.00 $ 56.00 Contribution margin $ 2,156,000 6,272 $ 48,272 Additional fixed costs $ 43,512 X Additional marketing costs $ 4,760 X Incremental income $ 6,000 X Change in incremental income Mc Graw