Question
Question 4 Gogo company produces four products: A, B and C. The following information is associated with the four products. Fixed manufacturing costs are applied
Question 4
Gogo company produces four products: A, B and C. The following information is associated with the four products. Fixed manufacturing costs are applied at a rate of $2.50 per machine hour.
| Per Unit | Product A | Product B | Product C |
| Selling Price | $26.00 | $28.00 | $31.00 |
| Variable Costs | 12 | 13 | 15 |
| Machine Hours required per unit | 0.6 H | 0.7H | 0.8H |
| Operating profit | $12.50 | $13.25 | $14.00 |
The constrained resource is machine hours
Requirements:
- Compute contribution margin per machine hour
- What priority should the products be produced and why?
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Vector Mechanics for Engineers Statics and Dynamics
Authors: Ferdinand Beer, E. Russell Johnston Jr., David Mazurek, Phillip Cornwell, Brian Self
11th edition
73398241, 978-0073398242
