Edgerron Company is able to produce two products, following information is available. and B, with the same machine in its factory. The Selling price per unit Variable costs per unit Product $ 240 105 Product B $ 270 162 Contribution margin per unit $ 135 $ 108 Machine hours to produce 1 unit Maximum unit sales per month 0.4 hours 650 units 10 hours 250 units 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 $13,500 additional fixed costs per month (Round hours per unit answers to 1 decimal place. Enter operating losses, if any. as negative values.) Product B s 108.00 1. Determine the contribution margin per machine hour that each product generates Product G Contribution margin per unit 135.00 0.4 Contribution margin per machine hour 329 00S wwwww Product Maximum number of units to be sold Hours required to produce maximum units 10800 Product B Total 250 2. How many units of Product G and Product B should the company produced it continues to operate with only one shift? How much total contribution margin does this mix produce each month Product Product B Total Hours dedicated to the production of each product Units produced for most profitable sales mix Contribution margin per unit ript as negative values.) 1. Determine the contribution margin per machine hour that each product generates. Product Contribution margin per unit $ 135.00 0.4 Contribution margin per machine hour $ 329.00 Product Maximum number of units to be sold 650 Hours required to produce maximum units Product B $ 108.00 1.0 S 108.00 Product B 250 Total 2. How many units of Product G and Product B should the company produce if it continues to operate with only one shift? How much total contribution margin does this mix produce each month? Product Product B Total Hours dedicated to the production of each product Units produced for most profitable sales mix Contribution margin per unit Total contribution margin-one shift PE 3. If the company adds another shift, how many units of Product G and Product B should it produce? How much total contribution margin would this mix produce each month? Product Product B Total Hours dedicated to the production of each product Units produced for most profitable sales mix Contribution margin per unit ! Total contribution margin-two shifts 4. Suppose that the company determines that it can increase Product G's maximum sales to 700 units per month by spending S12500 per month in marketing efforts. Should the company pursue this strategy and the double shift? Product Product B Total Hours dedicated to the production of each product SE2401 270 Units produced for most profitable sales mix Contribution margin per unit ript Product Product B Total Hours dedicated to the production of each product Units produced for most profitable sales mix Contribution margin per unit Total contribution margin-two shifts 4. Suppose that the company determines that it can increase Product G's maximum sales to 700 units per month by spending S12500 per month in marketing efforts. Should the company pursue this strategy and the double shift? Product G Product B Total Hours dedicated to the production of each product m 240 270 Units produced for most profitable sales mix Contribution margin per unit Total contribution margin-two shifts and marketing
