Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Can someone please help? Edgerron Company Is able to produce two products, G and B, with the same machine In its factory. The following Information

Can someone please help?

image text in transcribed
Edgerron Company Is able to produce two products, G and B, with the same machine In its factory. The following Information Is available. Product G Product B Selling price per unit $ 240 $ 270 Variable costs per unit 105 162 Contribution margin per unit $ 108 Machine hours to produce 1 unit 0.4 hours Maximum unit sales per month 1.8 hours 650 units 250 units 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 $13.500 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 Machine hours per unit Contribution margin per machine hour Product G Product B Total Maximum number of units to be sold 650 250 Hours required to produce maximum units 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 Hours dedicated to the production of each product Units produced for most profitable sales mix Contribution margin per unit Total contribution margin - one shift 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 Units produced for most profitable sales mix Contribution margin per unit Total contribution margin - two shifts Total incremental income 4. Suppose the company determines that it can increase Product G's maximum sales to 700 units per month by spending incremental income. $12.500 per month in marketing efforts. Should the company pursue this strategy and the double shift? Compute total Product G Product B Total Second shift without marketing campaign: Units produced for most profitable sales mix Contribution margin per unit Contribution margin $ 0 $ of Second shift with marketing campaign Units produced for most profitable sales mix Contribution margin per unit Contribution margin $ 0 $ of

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Statistics Unlocking The Power Of Data

Authors: Robin H. Lock, Patti Frazer Lock, Kari Lock Morgan, Eric F. Lock, Dennis F. Lock

1st Edition

0470601876, 978-0470601877

Students also viewed these Accounting questions