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Edgerron Company is able to produce two product, G and B with the same machine in its factory. The following information is availble. Edgerron Company
Edgerron Company is able to produce two product, G and B with the same machine in its factory. The following information is availble.
Edgerron Company is able to produce two products, G and B, with the same machine in its factory. The following information is available Product G $ 60 15 Product B $ 90 54 Selling price per unit Variable costs per unit Contribution margin per unit Machine hours to produce 1 unit $ 45 S 36 0.4 hours 600 units 1.0 hours 200 units Maximum unit sales per month The company presently operates the machine for a single eight-hour shift for 22 working days each month Management is thinking about operating the machine for two shifts, which will increase its productivity by another eight hours per day for 22 days per month. This change would require $4,500 additional fixed costs per month. (Round hours per unit answers to 1 decimal place. Enter operating losses, if any, as negative values.) Answer is not complete. 1. Determine the contribution margin per machine hour that each product generates. Product G Contribution margin per unit Machine hours per unit Contribution margin per machine hour Product B $45.00$36.00 1.0 $112.50 $36.00 Product B 0.4 Product G Total 200 200 Maximum number of units to be sold 600 Hours required to produce maximum units 240 440
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