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T&G Co. manufactures three types of computer desks. The income statement for the three products and the whole company is shown below: Sales Variable costs
T&G Co. manufactures three types of computer desks. The income statement for the three products and the whole company is shown below: Sales Variable costs Fixed costs Total costs Operating income (loss) Product A Product B Product C Total $77,000 $95,000 $150,000 $322,000 35,000 60,000 135,000 230,000 25,200 18,000 18,000 61,200 60,200 78,000 153,000 291,200 $ 16,800 $17,000 $(3,000) $30,800 The company produces 1,000 units of each product. The company's capacity is 17,000 machine hours. The machine hours for each product are 7 hours for Product A, 5 hours for Product B, and 5 hours for Product C. Fixed costs are allocated based on machine hours. If the current production levels are maintained, should the company eliminate Product C? T&G Co. should not eliminate Product C. If the company can sell unlimited quantities of any of the three products, which product should be produced? T&G Co. should produce If the company can sell unlimited quantities of any of the three products, which product should be produced? T&G Co. should produce Suppose the company can sell unlimited quantities of any of the three products. If a customer wanted to purchase 500 units of Product C, what would the minimum sale price per unit be for this order? Minimum sale price per unit The company has a contract that requires it to supply 500 units of each product to a customer. The total market demand for a single product units of each product should the company manufacture to maximize its total contribution margin including the contract? limited to 1,500 units. How many T&G Co. should manufacture Product A units Product B units Product C units
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