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			$	60				$	90
Variable costs per unit				15					54
Contribution margin per unit			$	45				$	36
Machine hours to produce 1 unit		0.4	hours				1.0	hours
Maximum unit sales per month		600	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 $4,500 additional fixed costs per month. (Round hours per unit answers to 1 decimal place. Enter operating losses, if any, as negative values.)

PLEASE INCLUDE INCREMENTAL INCOME IN PARTS 3 AND 4. AND CHANGE IN INCREMENTAL INCOME IN PART 4. The last time I posted this question, they did not include it in the answer or the steps and I was completely lost.

71 1. Determine the contribution margin per machine hour that each product generates Product G Product B Contribution margin perunt $ 45 00 $ 36.00 Machine hours per unit 0.4 10 Contribution margin per machine hour BOOK $ 11250 $ 36,00 Product G Product B 600 200 Total Maximum number of units to be sold Print Hours required to produce maximum units 240 200 440 2. How many units of Product G and Product B should the company produce fit 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 176 176 Units produced for most profitable sales mix 440 Contribution margin per unit $ 45.00 Total contribution margin-one shift s 19 800 $ 19,800 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 240 112 352 Units produced for most profitable sales mix 600 Contribution margin per unit S 45.00 S 36.00 Total contribution margin-two shifts $ 27.000 S 4.032 S 31 032 Total contributor mardin ona shift 19 RON 112 Prey 11 of 12 Next > Chapter 10 Homework Seved 11 2. points eBook 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 240 112 352 Units produced for most profitable sales mix 600 112 Contribution margin per unit s 45.00 $ 36.00 Total contribution margin-two shifts $ 27 000 $ 4,032 $ 31.032 Total contribution margin-one shift 19,800 Change in contribution margin 11,232 Change in fixed costs 4,500 Change in operating income foss) $ 6,732 Total incremental income $ 54,000 Should the company add another shift? Nes Print 4. Suppose the company determines that it can increase Products maximum sales to 700 units per month by sponding $3,500 per month in marketing efforts Should the company pursue this strategy and the double shift? Compute total incremental income, Product G Product B Total 112 600 45.00 S $ 3600 Second shift without marketing campaign Units produced for most profitable sales inix Contribution margin per unit Contribution margin Additional fixed costs incremental income S 27 000 $ 4,032 $ $ S 31 0323 4,500 54 000 M Llige i lixeu COSTS 4,5UUT 1 S Change in operating income(loss) Total incremental income Should the company add another shift? 6,732 54,000 $ Bok ant 4. Suppose the company determines that it can increase Product G's maximum sales to 700 units per month by spending $3.500 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 600 112 Contribution margin per unit $ 45.00 $ 36.00 Contribution margin S 27 000 $ 4,032 $ 31,032 Additional fixed costs $ 4,500 Incremental income $ 54,000 72 $ 700 45 00 $ 31,500 $ s 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? 36.00 2,592 $ $ 34 092 4500 3,500 $ $ 48,480 S 5,520 No Pro 71 1. Determine the contribution margin per machine hour that each product generates Product G Product B Contribution margin perunt $ 45 00 $ 36.00 Machine hours per unit 0.4 10 Contribution margin per machine hour BOOK $ 11250 $ 36,00 Product G Product B 600 200 Total Maximum number of units to be sold Print Hours required to produce maximum units 240 200 440 2. How many units of Product G and Product B should the company produce fit 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 176 176 Units produced for most profitable sales mix 440 Contribution margin per unit $ 45.00 Total contribution margin-one shift s 19 800 $ 19,800 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 240 112 352 Units produced for most profitable sales mix 600 Contribution margin per unit S 45.00 S 36.00 Total contribution margin-two shifts $ 27.000 S 4.032 S 31 032 Total contributor mardin ona shift 19 RON 112 Prey 11 of 12 Next > Chapter 10 Homework Seved 11 2. points eBook 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 240 112 352 Units produced for most profitable sales mix 600 112 Contribution margin per unit s 45.00 $ 36.00 Total contribution margin-two shifts $ 27 000 $ 4,032 $ 31.032 Total contribution margin-one shift 19,800 Change in contribution margin 11,232 Change in fixed costs 4,500 Change in operating income foss) $ 6,732 Total incremental income $ 54,000 Should the company add another shift? Nes Print 4. Suppose the company determines that it can increase Products maximum sales to 700 units per month by sponding $3,500 per month in marketing efforts Should the company pursue this strategy and the double shift? Compute total incremental income, Product G Product B Total 112 600 45.00 S $ 3600 Second shift without marketing campaign Units produced for most profitable sales inix Contribution margin per unit Contribution margin Additional fixed costs incremental income S 27 000 $ 4,032 $ $ S 31 0323 4,500 54 000 M Llige i lixeu COSTS 4,5UUT 1 S Change in operating income(loss) Total incremental income Should the company add another shift? 6,732 54,000 $ Bok ant 4. Suppose the company determines that it can increase Product G's maximum sales to 700 units per month by spending $3.500 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 600 112 Contribution margin per unit $ 45.00 $ 36.00 Contribution margin S 27 000 $ 4,032 $ 31,032 Additional fixed costs $ 4,500 Incremental income $ 54,000 72 $ 700 45 00 $ 31,500 $ s 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? 36.00 2,592 $ $ 34 092 4500 3,500 $ $ 48,480 S 5,520 No Pro