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Raven Co. owns a machine that can produce two specialized products. Production time for Product X is two units per hour and for Product
Raven Co. owns a machine that can produce two specialized products. Production time for Product X is two units per hour and for Product Z is five units per hour. The machine's capacity is 2,400 hours per year. Both products are sold to a single customer who has agreed to buy all of the company's output up to a maximum of 4,080 units of Product X and 2,260 units of Product Z. Selling prices and variable costs per unit to produce the products follow. $ per unit Selling price per unit Variable costs per unit Product X $12.50 3.75 Product Z $7.50 4.50 Determine the company's most profitable sales mix and the contribution margin that results from that sales mix. (Round per unit contribution margins to 2 decimal places.) Contribution margin per unit Units produced per hour Contribution margin per production hour Product X Product Z Maximum number of units to be sold Product X Product Z Total 4,080 2,260 Hours required to produce maximum units For Most Profitable Sales Mix Product X Product Z Total Hours dedicated to the production of each product Units produced for most profitable sales mix Contribution margin per unit Total contribution margin
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