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Edgerron Company is able to produce two products, G and B, with the same machine in its factory. The following information is available Selling price
Edgerron Company is able to produce two products, G and B, with the same machine in its factory. The following information is available Selling price per unit Variable costs per unit Contribution margin per unit Machine hours to pr duce 1 unit Maximum unit sales per month Product G 110 40 $ 70 0.4 hours 500 units Product B S 140 84 $ 56 1.0 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 $7,000 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 CG Product EB Contribution margin per unit Machine hours per unit Contribution margin per machine hour 70.00 S 0.4 175.00 S 56.00 1.0 56.00 Product G Product B Total Maximum number of units to be sold 500 250 Hours required to produce maximum units
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