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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

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 2,500 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 4,250 units of Product TLX and 4,752 units of Product MTV. Selling prices and variable costs per unit to produce the products follow.

$ per unit Product TLX Product MTV
Selling price per unit $ 13.50 $ 8.10
Variable costs per unit 4.05 4.86

Determine the company's most profitable sales mix and the contribution margin that results from that sales mix. (Round per unit contribution margins to 2 decimal places.)

Product TLX Product MTV
Contribution margin per unit $9.45 $3.24
Contribution margin per production hour $28.35 $12.96
Product TLX Product MTV Total
Maximum number of units to be sold 4,250 4,752
Hours required to produce maximum units 1,417 1,188 2,605
For Most Profitable Sales Mix Product TLX Product MTV Total
Hours dedicated to the production of each product 1,417 1,083 2,500
Units produced for most profitable sales mix 4,251 4,332
Contribution margin per unit
Total contribution margin

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