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 $ 190 $ 220 Variable costs per unit 80 132 Contribution margin per unit $ 110 $ 88 Machine hours to produce 1 unit 0.4 hours 1.0 hours Maximum unit sales per month 550 units 200 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 $11,000 additional fixed costs per month. (Round hours per unit answers to 1 decimal place. Enter operating losses, if any, as negative values.)

1. Determine the contribution margin per machine hour that each product generates.
	Product G	Product B
Contribution margin per unit
Machine hours per unit
Contribution margin per machine hour
	Product G	Product B	Total
Maximum number of units to be sold
Hours required to produce maximum units
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 G	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
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?
	Product G	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
Total contribution margin- one shift
Change in contribution margin
Change in fixed income
Change in operating income (loss)
Total incremental income
Should the company add another shift?
4. Suppose the company determines that it can increase Product G's maximum sales to 600 units per month by spending $10,000 per month in marketing efforts. Should the company pursue this strategy and the double shift? Compute total incremental income
	Product G	Product B	Total
Second shift without marketing campaign
Units produced for most profitable sales mix
Contribution margin per unit
Contribution margin
Additional fixed costs
Incremental income
Second shift with marketing campaign
Units produced for most profitable sales mix
Contribution margin per unit
Contribution margin
Additional fixed costs
Additional marketing costs
Incremental income
Change in incremental income
Should the company pursue this strategy and the double shift?