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Colt Company produces two skateboard models. Machine time per unit for Hero is two hours and for Flip is one hour. The machine's capacity
Colt Company produces two skateboard models. Machine time per unit for Hero is two hours and for Flip is one hour. The machine's capacity is 1,780 hours per year. Colt can sell up to 608 units of Hero and 864 units of Flip per year. Selling prices and variable costs follow. Hero Selling price per unit $ 156 Flip $ 98 Variable costs per unit 52 56 (a) Compute the contribution margin per machine hour for each product. Fixed costs Contribution margin per unit Contribution margin per machine hour + Hero Flip (b) Determine the best sales mix of products. ces Hero Flip Total Units produced and sold for most profitable sales mix Hours required to produce most profitable sales mix (c) Compute the total contribution margin for the best sales mix. Hero Flip Total Units produced for most profitable sales mix Contribution margin per unit Total contribution margin
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