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Edge Company produces two models of its product with the same machine. The machine has a capacity of 160 hours per month. The following information
Edge Company produces two models of its product with the same machine. The machine has a capacity of 160 hours per month. The following information is available. Selling price per unit Variable costs per unit Contribution margin per unit Machine hours per unit Maximum unit sales per month Standard $ 170 70 S 100 Deluxe $ 200 120 $ 80 1 hour 550 units 2 hours 200 unita Required: Deluxe 1. Determine the contribution margin per machine hour for each model Product Contribution Margin Contribution margin per unit $ Machine hours per unit Contribution margin per machine hour $ Standard 100 s 80 1 2 100 S 40 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 160 160 Units produced for most profitable sales mix 160 Contribution margin per unit 100 80 Total contribution margin $ 16,000 $ 0 16.000 S 3. Assume the maximum demand for the Standard model is 80 units (not 550 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 Contribution margin per unit Total contribution margin
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