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Can't seem to figure our part 4 correctly 4. Suppose the company determines that it can increase Product G's maximum sales to 700 units per
Can't seem to figure our part 4 correctly
4. Suppose the company determines that it can increase Product G's maximum sales to 700 units per month by spending $12,000 per month in marketing efforts. Should the company pursue this strategy and the double shift? Compute total incremental income. Product G Product B Total Second shift without marketing campaign: Units produced for most profitable sales mix Contribution margin per unit Contribution margin Additional fixed costs 700 80.00 56,000 $ $ 72 70.00 5,040 $ $ $ 61,040 55,840 X 5,200 X Incremental income Second shift with marketing campaign: Units produced for most profitable sales mix Contribution margin per unit Contribution margin Additional fixed costs Additional marketing costs 700 80.00 56,000 $ $ 720|| 70.00 5,040 $ $ $ $ $ 61,040 5,200 X 12,000 15,000 X (21,800) X Incremental income Change in incremental income Should the company pursue this strategy and the double shift? No Edgerron Company is able to produce two products, G and B, with the same machine in its factory. The following information is available. Selling price per unit Variable costs per unit Contribution margin per unit Machine hours to produce 1 unit Maximum unit sales per month Product G $ 120 40 $ 80 0.4 hours 600 units Product B $ 160 90 $ 70 1.0 hours 200 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 $15,000 additional fixed costs per month. (Round hours per unit answers to 1 decimal place. Enter operating losses, if any, as negative values.)Step by Step Solution
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