Edgerron Company

Edgerron Company Is able to produce two products, G and Br with the same machine In Its factory. The following Information Is avallable. Pro-duct G Precinct B Selling price per unit $ 132 $ 160 Variable costs per unit 50 9'5 Contribution margin per unit $ 32 $ 6'1 Machine hours to produce 1 unit 0-4 hours 1-0 hours Maximum unit sales per month 600 units 150 units The company preseriithir operates the machlne fora single elghthour shift for Dmrklng days each month. Management Is thinking about operating the machine for two shifts, which will Increase Its productivity by another eight hours per dag.I for22 days per month This change would reoulre $3,000 addltlonal fixed costs per month. [Round hours per unit answers to 1 decimal place. Enter operating losses, If any, as negative value-5.] 1. Determine the contribution rriargin per machine hourthat each product generates. Contribution rriargin per machine hour Maximum numberofuniisto besoid Hours required to produce maximum units 2. How many units of Product G and Product Ei shouid the company produce if it continues to operate with only one shift? HEW much total contribution margin does this mix produce each month? Hours dedicated to the production ofeach product Units produced for most protabie sales mix Contribution margin per unit Total contribution margin one shi 3. lfthe company adds another shift, how many units of Product G and Product El should it produce? How much total incremental income would this mix produce each month? Should the company add the new shi'? Hours dedicated to the production ofeach product Unils produced for most protable sales mix Contribution margin per unit Total contribution margin - two shifts Total in cremental in come 4. Suppose the company determines that it can increase Product G's maximum sales to Til-l]- units per month by spending SID-EH} per month in marketing efforts. Should the company pursue this strategy and the double shi? Compute total incremental income. Second shi without marketing campaign: Unils produced for most protable sales mix Contribution margin per unit Contribution margin Second shift with marketing campaign: Unils produced for most protable sales mix Contribution margin per unit Contribution margin