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Edge Company produces two models of its product with the same machine. The machine has a capacity of 154 hours per month. The following information
Edge Company produces two models of its product with the same machine. The machine has a capacity of 154 hours per month. The following information is available. Standard Deluxe Selling price per unit $ 140 $ 170 Variable costs per unit 55 102 Contribution margin per unit $ 85 $ 68 Machine hours per unit 1 hour 2 hours Maximum unit sales per month 500 units 200 units Required: 1. Determine the contribution margin per machine hour for each model. Product Contribution Margin Standard Deluxe Contribution margin per unit $ 85 68 Machine hours per unit 2 Contribution margin per machine hour 85 68 2. How many units of each model should the company produce? How much total contribution margin does this mix produce per month? Standard Deluxe Total Hours dedicated to the production of each product Units produced for most profitable sales mix Contribution margin per unit 85 68 Total contribution margin $ $ 0 3. Assume the maximum demand for the Standard model is 80 units (not 500 units). How many units of each model shouldStandard Deluxe Total Hours dedicated to the production of each product Units produced for most profitable sales mix Contribution margin per unit 85 68 Total contribution margin $ 0 $ 0 3. Assume the maximum demand for the Standard model is 80 units (not 500 units). How many units of each model should the company produce? How much total contribution margin does this mix produce per month? Standard Deluxe Total Hours dedicated to the production of each product Units produced for most profitable sales mix 80 Contribution margin per unit $ 85.00 Total contribution margin 6,800
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