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Sell at Split-Off or Process Further Bozo Inc, manufactures two products from a joint production process. The joint process costs $110,000 and yields 6,000 pounds
Sell at Split-Off or Process Further Bozo Inc, manufactures two products from a joint production process. The joint process costs $110,000 and yields 6,000 pounds of LTE compound and 14,000 pounds of HS compound. LTE can be sold at split off for $55 per pound. HS can be sold at split-off for $9 per pound. A buyer of HS asked Bozo to process HS further into cs compound. IHS were processed further, it would cost $$1,000 to turn 14,000 pounds of Hsinto 4,000 pounds of cs. The cs would sell for $54 per pound Required: 1. What is the contribution to income from selling the 14,000 pounds of HS at split-off? 2. CONCEPTUAL CONNECTION: What is the contribution to income from processing the 14,000 pounds of HS into 4,000 pounds of CS? Should Boro continue to sell the HS at split off or process it further into CS? Continue to sell the HS at split-off Process it further into CS Choosing the optimal Product Mix with One Constrained Resource Billings Company produces two products, Product Reno and Product Tahoe. Each product goes through its own assembly and finishing departments. However, both of them must go through the painting department. The painting department has capacity of 1,944 hours per year. Product Reno has a unit contribution margin of 596 and requires four hours of painting department time. Product Tahoe has a unit contribution margin of $78 and requires three hours of painting department time. There are no other constraints Required: 1. What is the contribution margin per hour of painting department time for each product? Contribution Margin Reno Tahoe 2. What is the optimal mix of products? Tf an amount is zero, enter "o Optimal Mix Reno units Tahoe units 3. What is the total contribution margin earned for the optimal mix
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