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 Product B Selling price per unit $ 240 $ 270 Variable costs per unit 105 162 Contribution margin per unit $ 135 $ 108 Machine hours to produce 1 unit 0.4 hours 1.0 hours Maximum unit sales per month 650 units 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.)

3. If the company adds another shift, how many units of Product G and Product B should it produce? How much total incremental income would this mix produce each month? Should the company add the new shift? Hours dedicated to the production of each product Units produced for most protable sales mix Contribution margin per unit Total contribution margin two shifts $ 97,686 Total contribution margin one shift Change in contribution margin Change in xed costs Change in operating incomerss} Total incremental income Should the company:r add another shift? 4. Suppose the company determines that it can increase Product G's maximum sales to 700 units per month by spending $12500 per month in marketing eorts. Should the company pursue this strategy and the double shift? Compute total incremental income. Second shift without marketing campaign: Units produced for most protable sales mix Contribution margin per unit 3 135.00 $ 103.00 Contribution margin 3 94,500 $ 7,??6 Additional xed costs Incremental income $ 1 02,276 $ 97,686 $ 4,590 Second shift with marketing campaign: Units produced for most protable sales mix Contribution margin per unit Contribution margin 93 E E9 D 1. Determine the contribution margin per machine hour that each product generates. Contribution margin per unit $ 135.00 0.4 $ 108.00 Machine hours per unit 54.00 Contribution margin per machine hour $ 108.00 Maximum number of units to be sold \" Hours required to produce maximum units 510 2. How many units of Product G and Product B should the company produce it it continues to operate with onlyr one shift? How much total contribution margin does this mix produce each month? Hours dedicated to the production of each product __ 1T6 Units produced for most protable sales mix __ Contribution margin per unit 135.00 _ $ Total contribution margin one shift $ 08.350 _ $ 68,850