Question
Profitability Analysis (10%) Razerian makes production for audio. A total of 500 hours in January 2021 is available per month in this operation beause they
- Profitability Analysis (10%)
Razerian makes production for audio. A total of 500 hours in January 2021 is available per month in this operation beause they face COVID 19, so they must decrease their productive hours. Data concerning the companys four products appear below:
| Headphone | Earbuds | Speaker Bluetooth | Home theather |
Monthly demand in units | 80 | 120 | 100 | 140 |
Hours required in operation per unit | 0.6 | 1.8 | 0.4 | 2.5 |
Unit contribution margin | $12 | $36 | $8 | $50 |
Variable Expenses | $8 | $20 | $5 | $30 |
No fixed costs could be avoided by modifying how many units are produced of any product or even by dropping any one of the products.
- Within this month, calculate the contribution margin and what should Razerian do if they want to get optimum margin? (5%)
- Suppose that youre Razerians Business Director, what should you take place to get the optimum sales revenue? (5%)
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