Question
Rodham Inc. manufactures two products (A & B). Both products include emitrol and ullocide as part of the materials for productions. The costs below are
Rodham Inc. manufactures two products (A & B). Both products include emitrol and ullocide as part of the materials for productions. The costs below are computed at a monthly capacity level of 10,000 units of each product. Rodham has more demand for each of the two products than it can meet. It as been operating at capacity for the last year. Product A Product B Sales price per unit 380 910 Variable cost per unit 280 460 Common fixed costs per unit 22 59 Ounces of emitrol needed per unit 1 25 Ounces of ullocide needed per unit 4 10 1. What is the contribution margin per unit for Product A? 2. What is the contribution margin per unit for Product B? 3. Rodham has learned that there is a shortage of emitrol. Next month, only 8100 ounces of emitrol will be available for use. Which product should Rodham produce, given these facts? Type just A or B 4. Assume the limitation stated in question 3. What is the projected total contribution margin for Rodham next month if they choose to only produce Product A? 5. Assume the limitation stated in question 3. What is the projected total contribution margin for Rodham next month if they choose to only produce Product B?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Rodham Inc Production Analysis 1 Contribution Margin per Unit To find the contribution margin per un...Get Instant Access to Expert-Tailored 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