Question
Johnson Company manufactures and sells three products. Relevant per unit data concerning each product are given below: A B C _______________________________________________________________________________________ Selling Price $8 $15
Johnson Company manufactures and sells three products. Relevant per unit data concerning each product are given below:
A B C
_______________________________________________________________________________________
Selling Price $8 $15 $20
_________________________________________________________________________________________
Variable costs and expenses $6 $13 $17
__________________________________________________________________________________________
Machine hours to produce 2 1 2
____________________________________________________________________________________________
-Compute the contribution margin per unit of limited resource (Machine hours) for each product.
Product A Product B Product C
______________________________________________________________________________________________________________________
Contribution margin per unit of limited resources $ ? $ ? $ ?
_______________________________________________________________________________________________________________________
-Assuming 3,000 additional machine hours are available, which product should be manufactured? Product A, Product B or Product C?
-What is the total contribution margin if the additional hours are (1) divided equally amount the products, and (2) if they are allocated entirely to the product identified above
Total Contribution Margin
___________________________________________________________________________
(1) Divide equally among the product $ ?
(2) Allocate entirely to the product identified above $ ?
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