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Edge Company produces two models of its product with the same machine. The machine has a capacity of 166 hours per month. The following
Edge Company produces two models of its product with the same machine. The machine has a capacity of 166 hours per month. The following information is available. Selling price per unit Standard $ 200 Deluxe $ 230 85 138 $ 92 1 hour 650 units 2 hours 250 units Variable costs per unit Contribution margin per unit Machine hours per unit $ 115 Maximum unit sales per month Required: 1. Determine the contribution margin per machine hour for each model. Product Contribution Margin Contribution margin per unit Standard Deluxe Contribution margin per machine hour 2. How many units of each model should the company produce? How much total contribution margin does this mix produce per month? Hours dedicated to the production of each product Standard Deluxe Total Units produced for most profitable sales mix Contribution margin per unit Total contribution margin 3. Assume the maximum demand for the Standard model is 80 units (not 650 units). How many units of each model should the company produce? How much total contribution margin does this mix produce per month? Hours dedicated to the production of each product Units produced for most profitable sales mix Contribution margin per unit Total contribution margin Standard Deluxe Total
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