Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Conroy Company manufactures two productsB100 and A200. The company provided the following information with respect to these products: B100 A200 Estimated customer demand (in units)

Conroy Company manufactures two productsB100 and A200. The company provided the following information with respect to these products:

B100 A200
Estimated customer demand (in units) 2,800 2,000
Selling price per unit $ 1,200 $ 2,100
Variable expenses per unit $ 700 $ 1,200

The company has four manufacturing departmentsFabrication, Molding, Machining, and Assemble & Pack. The capacity available in each department (in hours) and the demands that one unit of each of the companys products makes on those departments is as follows:

B100 (hours per unit)

A200 (hours per unit) Capacity (in hours)
Fabrication 1 2 4,000
Molding 2 2 6,000
Machining 2 0 5,000
Assemble & Pack 0 3 4,500

The company is trying to decide what product mix will maximize profits. Given that its fixed costs will not change regardless of the chosen mix, the company plans to identify the product mix that maximizes its total contribution margin.

a. What is the maximum contribution margin the company can earn with its available resources if it increases the price of B100 to $1,400?

b. How many units of each product is the company producing to earn the contribution margin from requirement 8a?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Auditing Organizational Communication A Handbook Of Research Theory And Practice

Authors: Owen Hargie, Dennis Tourish

2nd Edition

0415414466, 978-0415414463

More Books

Students also viewed these Accounting questions

Question

Differentiate accounts receivable from notes receivable. LO1.

Answered: 1 week ago