Question
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
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 $ 120 $ 150 Variable costs per unit 45 90 Contribution margin per unit $ 75 $ 60 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 $7,500 additional fixed costs per month.
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