Edgerron Company is able to produce two products, G and B, with the same machine in its factory. The following information is available.

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 $9,000 additional fixed costs per month. (Round hours per unit answers to 1 decimal place. Enter operating losses, if any, as negative values.)

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dgerron Company is able to produce two products, G and B. with the sa ailable. Product G Product B Selling price per unit Variable costs per unit $150 $ 180 60 108 Contribution margin per unit $ 90 S 72 Machine hours to produce 1 unit Maximum unit sales per month 1.0 hours 200 units 0.4 hours 550 units he company presently operates the machine for a single eight-hour shif bout operating the machine for two shifts, which will increase its produc his change would require $9.000 additional fixed costs per month. (Rou operating losses, if any, as negative values.) tion marnin ner machine hour that each product generates ine company presently operates the machine tor a singie eignt-nour sht tor 22 working days eacn month Managem about operating the machine for two shifts, which will increase its productivity by another eight hours per day for 22 This change would require $9.000 additional fixed costs per month. (Round hours per unit answers to 1 decimal plam operating losses, if any, as negative velues.) 1. Determine the contribution margin per machine hour that each praduct generates. Product G Product B Contribution margin per unit Contribution margin per machine hour Product B Total Product G 550 200 Maximum number of units to be sald Hours required to produce maximum units 2 How many units of Praduct G and Product B should the company produce it continues to operate eth only dne sht How much total contribution margin does this mix produce each month? Total Product B Product G Hours dedicated to the production of each product Units produced for most prostable sales mix Contribution margin per unit Total contribution margin one shit Nost 3 6 Loninounon margin per unt 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 B Product G 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 incremental income 4 Suppose the company determines that it can increase Product Gs maximum sales to 600 units per month by spnng 58.000 per month in marketing eforts Should the company pursue this strategy and the doubie shit? Compule t incremental income Product 8 Product G Second shit without marketing campaign Piey 3 f 6 4. Suppose the company determines that it can increase Product G's maximum sales to 600 units per month by spending " $8,000 per month in marketing efforts Should the company pursue this strategy and the double shif? Compute fotal incremental income Total Product B Product G Second shift without marketing campaign Units produced for most profitable sales mix Contribution margin per unit Contribution margin Second shift with marketing campaign Units produced for most profitable sales mix Contribution margin per unit Contribution margin 0 Next