Colt Company owns a machine that can produce two specialized products. Production time for Product TLX is two units per hour and for Product MTV is five units per hour. The machine's capacity is 2,200 hours per year. Both products are sold to a single customer who has agreed to buy all of the company's output up to a maximum of 3,740 units of Product TLX and 2,020 units of Product MTV. Selling prices and variable costs per unit to produce the products follow. Product TLX $14.50 Selling price per unit Variable costs per unit Product MTV $8.70 5.22 4.35 Determine the company's most profitable sales mix and the contribution margin that results from that sales mix. (Round cost per unit answers to 2 decimal places.) Contribution margin per unit Units produced per hour Contribution margin per production hour Product TLX Product MTV 10.151 $ 3.48 21 5.08 $ 0.70 Total Maximum number of units to be sold Hours required to produce maximum units Product TLX 3,740 7,480 Product MTV 2,020 10,100 17,580 Product MTV Total For Most Profitable Sales Mix Hours dedicated to the production of each product Product TLX 2,200 Units produced for most profitable sales mix Contribution margin per unit Total contribution margin 1,100 10.15 $ 0.00 Colt Company owns a machine that can produce two specialized products. Production time for Product TLX is two units per hour and for Product MTV is five units per hour. The machine's capacity is 2,200 hours per year. Both products are sold to a single customer who has agreed to buy all of the company's output up to a maximum of 3,740 units of Product TLX and 2,020 units of Product MTV. Selling prices and variable costs per unit to produce the products follow. Selling price per unit Variable costs per unit Product TLX $14.50 4.35 Product MTV $8.70 5.22 Determine the company's most profitable sales mix and the contribution margin that results from that sales mix. (Round cost per unit answers to 2 decimal places.) Answer is complete but not entirely correct. $ Contribution margin per unit Units produced per hour Contribution margin per production hour Product TLX Product ILX $ 10.15 2 $ 5.08 Product MTV 3.48 5 0.70 $ Total Maximum number of units to be sold Hours required to produce maximum units Product TLX 3,740 7,480 % Product MTV 2,020 10,100 X 17,580 Droduct TL Product TLX Product MTV Total For Most Profitable Sales Mix Hours dedicated to the production of each product 2,200 Units produced for most profitable sales mix Contribution margin per unit Total contribution margin 1,100 10.15 $ 0.00
