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			$	100				$	130
Variable costs per unit				35					78
Contribution margin per unit			$	65				$	52
Machine hours to produce 1 unit		0.4	hours				1.0	hours
Maximum unit sales per month		500	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 $6,500 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 GProduct BContribution margin per unitContribution margin per machine hourProduct GProduct BTotalMaximum number of units to be sold500250Hours required to produce maximum units2. 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 GProduct BTotalHours dedicated to the production of each productUnits produced for most profitable sales mixContribution margin per unitTotal contribution margin - one shift3. 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 GProduct BTotalHours dedicated to the production of each productUnits produced for most profitable sales mixContribution margin per unitTotal contribution margin - two shiftsTotal incremental income4. Suppose the company determines that it can increase Product Gs maximum sales to 600 units per month by spending $5,500 per month in marketing efforts. Should the company pursue this strategy and the double shift? Compute total incremental income.Product GProduct BTotalSecond shift without marketing campaign:Units produced for most profitable sales mixContribution margin per unitContribution margin$0$0Second shift with marketing campaign:Units produced for most profitable sales mixContribution margin per unitContribution margin$0$0

1. Determine the contribution margin per machine hour that each product generates Product G Contribution margin per unit Product B Contribution margin per machine hour Product Product B Total 500 250 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 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 incremental income