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Exercise 23-9 Sales mix determination and analysis LO A1 Colt Company owns a machine that can produce two specialized products. Production time for Product TLX
Exercise 23-9 Sales mix determination and analysis LO A1 Colt Company owns a machine that can produce two specialized products. Production time for Product TLX is two units per hour and for Product MTV is five units per hour. The machine's capacity is 2,300 hours per year. Both products are sold to a single customer who has agreed to buy all of the company's output up to a maximum of 3,910 units of Product TLX and 2,025 units of Product MTV. Selling prices and variable costs per unit to produce the products follow. $s per unit Selling price per unit Variable costs per unit Product T LX Product MTV $11.00 $6.60 3.30 3.96 Determine the company's most profitable sales mix and the contribution margin that results from that sales mix. (Round cost per unit answers to 2 decimal places.) Product MTV Product TLX Contribution margin per unit Contribution margin per production hour Product TLX Product MTV Total Maximum number of units to be sold Hours required to produce maximum units 3,910 2,025 For Most Profitable Sales Mix Product TLX Product MTV Total Hours dedicated to the production of each product Units produced for most profitable sales mix Contribution margin per unit Total contribution margin
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