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Limar, Inc. manufactures three different motors - AX, BX, and CX. Data on the motors is presented below: Budget Information: AX BX Inventory units, January
Limar, Inc. manufactures three different motors - AX, BX, and CX. Data on the motors is presented below: Budget Information: AX BX Inventory units, January 1, 2022 2.000 2.200 2.400 Production units in 2022 3,600 3,400 3,000 Units sold in 2022 3,300 3,000 3,600 Production units in 2023 4,500 3,200 3,400 Estimated Inventory units, December 31, 2023 2,300 1.600 2.000 8 Cost and Production Information: Selling price $620 $560 $450 Unit variable cost $360 $200 $240 Machine-hours per unit 9 7 Avoidable fixed costs, if product line is not produced $240,000 $278,000 $255,000 Limar's production capacity is 80,200 machine-hours per year. Limar is currently facing a business decision in 2023: KoCo, the Korean subsidiary of Limar, currently purchases 6,000 units of a simpler version (AX-N) of AX, from its local supplier at $560 each. If Limar was to make AX-N, the company estimates that AX-N would result in variable costs of $320 per unit and will require only 6 machine hours per unit to manufacture. Furthermore, Limar will invest in a new stamping machine solely for the production of AX-N for a fixed cost of $480,000. If Limar produces 6,000 units for Koco, it will not produce and sell AX to compete with KoCo. Please enter your answers without "$", and "." Calculate the following items: AX BX CX The budgeted Sale units for each model for 2023. units units units $ $ $ The contribution margin per unit for each model. $ $ The profitability index for each model. (Round to 1 decimal point.) Hours Ranking the order of priority for production. Calculate the total production hours required for the 3 models. For which model should production be reduced and by how many units? The number of units should be reduced. units
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