Colt Company owns a machine that can produce two specialized products. Production time for Product TLX is three units per hour and for Product MTV is four units per hour. The machines capacity is 2,600 hours per year. Both products are sold to a single customer who has agreed to buy all of the companys output up to a maximum of 4,420 units of Product TLX and 4,838 units of Product MTV. Selling prices and variable costs per unit to produce the products follow.

Exercise 23-9 Sales mix determination and analysis LO A1 Colt Company owns a machine that can produce two specialized products. Production time for Product TLX is three units per hour and for Product MTV is four units per hour. The machine's capacity is 2,600 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 4,420 units of Product TLX and 4,838 units of Product MTV. Selling prices and variable costs per unit to produce the products follow. $5 per unit Selling price per unit Variable costs per unit Product TLX $11.50 3.45 Product MTV $6.90 4.14 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.) Product TLX Product MTV Contribution margin per unit Units produced per hour Contribution margin per production hour Product TLX Total Product MTV 4,838 4,420 Maximum number of units to be sold Hours required to produce maximum units Total For Most Profitable Sales Mix Product TLX Product MTV Hours dedicated to the production of each product Produce most profitable units until the market demand has been satisfied. Units produced for most profitable sales mix 4,4201 Contribution margin per unit Total contribution margin