Problem 10-5A Analyzing sales mix strategies LO P3

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				$	160
Variable costs per unit				40					90
Contribution margin per unit			$	80				$	70
Machine hours to produce 1 unit		0.4	hours				1.0	hours
Maximum unit sales per month		600	units				200	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 $15,000 additional fixed costs per month. (Round hours per unit answers to 1 decimal place. Enter operating losses, if any, as negative values.)

Problem 10-5A Analyzing sales mix strategies LO P3 Edgerron Company is able to produce two products. G and B. with the same machine in its factory. The following informations available Producto $120 Selling price per unit Variable costs por un Contribution in par unit Machines to pe 1 unit Maxim unit sales personit $ 2.4 Tours 688 wts Products $ 150 9e 78 1. TOUS 280 uits The company presently operstes the machine for a single eigint-hour shift for 22 wording osys esch month Maragement thinking about operating the machine for two shifts, which will increase its productivity by another elgit hours per day for 2 daya per month This change would require $15.000 eddional Fixed costs per month. (Round hours per unit answers to 1 decimal place. Enter operating losses, if any, es negative values.) t. Determine the contribution maron por meine hour that each product gros Producto Contribuson margin perunt Produote Contribution margin per machine hour Total Produota 600 Produof 200 Maximum number of units to be told Hours obred to produce mammunits 12. How many units of Product and Procuct should the company product continues to operate with only one shit? How much total contribution margin does this a produce each month? Product Produode Total Hours andicated to the production of each product Units produced for most profitabi sales mix Contribution margin per unit Total contributos merginos 3. If the company adds another shit, how many units of Product G and Product B should produce? How much total incremental income would this mix produce each month? Should the company and the new shin? Product Produot Total Hours dedicated to the production of each product Units prod.cod for most profitable sales mix Contribution margin por un Total contribuon margin-two shits Total incremental income 14. S.poose the comandamies at it can increze Product Gsmuimum sales to 700 per month by spending $12,000 per month in marketing afforts. Sould the company pursue this strategy and the double shit? Comouc incremental income Produota Produits Total Second shit without maiting campaign Units produced for most probable des mix Contribution margin per un Contribution margin Second shit with marketing campaign Units produced for most profitable sales mix Contribution margin per una Contribuon magn