Answered step by step
Verified Expert Solution
Question
1 Approved Answer
M Company produces three products A, B, and C. You are provided with following particulars: Product A Product B Product $120 $100 $150 30% 25%
M Company produces three products A, B, and C. You are provided with following particulars: Product A Product B Product $120 $100 $150 30% 25% 20% Selling price Contribution margin ratio Machine hours per unit Demand for one month 7.5 hours tao 12.5 hours 12 hours 2,000 units 4,000 units 1,000 units If the total machine hours available for production is 65,000 hours and total fixed cost is $180,000 per month, how many units of each product should be produced and sold in order to get maximum profit, if it makes optimal use of the its available machines hours? Select one: O a. Product A 2,000 units only O b. Product A 2,000 units and Product B 4,000 units c. Product A 2,000 units; Product B 4,000 units; and Product C 500 units O d. Product A 2,000 units; Product B 4,000 units; and Product C1,000 units For each segment, 40% of its cost of goods sold and operating expenses are variable expen the remaining balances are fixed expenses. Total fixed expenses (operating and manufact were allocated to each segment as follows: Fixed Expenses Allocated to Each Segment Product A $20,000 tao Product B $50,000 $70,000 Product C What would be the effect on the company's overall profit, if Product B was dropped? Select one: O a. Overall company's profit will decrease by $30,000. O b. The overall company's profit will increase by $20,000. O c. Overall company's profit will increase by $90,000. O d. Overall company's profit will increase by $50,000
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started