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Tyler Guitars makes acoustic and electric guitars. It is struggling to determine the profitability of each gultar and deciding on which guitar to focus its
Tyler Guitars makes acoustic and electric guitars. It is struggling to determine the profitability of each gultar and deciding on which guitar to focus its sales efforts. Tyler currently operates a single 8-hour shift for 22 days per month. The Tableau Dashboard shows data from the recent month. Selling Price & Variable Costs per Guitar Acoustic Variable Cost Selling Price Acoustic Variable Cost: $95 Electric Variable Cost Selling Price SO $50 $100 $150 $200 $250 $300 Tyler Guitars makes acoustic and electric guitars. It is struggling to determine the profitability of each guitar and deciding on which guitar to focus its sales efforts. Tyler currently operates a single 8-hour shift for 22 days per month. The Tableau Dashboard shows data from the recent month. Selling Price & Variable Costs per Guitar Acoustic Variable Cost Selling Price Acoustic Selling Price: $225 Electric Variable Cost Selling Price $0 $50 $100 $150 $200 $250 $300 Tyler Guitars makes acoustic and electric guitars. It is struggling to determine the profitability of each guitar and deciding on which guitar to focus its sales efforts. Tyler currently operates a single 8-hour shift for 22 days per month. The Tableau Dashboard shows data from the recent month. Selling Price & Variable Costs per Guitar Acoustic Variable Cost Selling Price Electric Variable Coke Selling Price Electric Variable Cost: $120 $o $50 $100 $150 $200 $250 $300 Tyler Guitars makes acoustic and electric guitars. It is struggling to determine the profitability of each guitar and deciding on which guitar to focus its sales efforts. Tyler currently operates a single 8-hour shift for 22 days per month. The Tableau Dashboard shows data from the recent month. Selling Price & Variable Costs per Guitar Acoustic Variable Cost Selling Price Electric Variable Cost Selling Price Electric Selling Price: $300 $0 $50 $100 $150 $200 $250 $300 Machine Hours per Guitar Maximum Guitar Sales per Month 4 hrs. 150 guitars 3 hrs. 125 guitars 100 guitars 2 hrs. 75 guitars Acoustic 2 machine hours 50 guitars 1 hrs. 25 guitars Ohrs. O guitars Acoustic Electric Acoustic Electric Machine Hours per Guitar Maximum Guitar Sales per Month 4 hrs. 150 guitars 3 hrs. 125 guitars Electric 3 machine hours 100 guitars 2 hrs. 75 guitars 50 guitars 1 hrs. 25 guitars O hrs. O guitars Acoustic Electric Acoustic Electric Machine Hours per Guitar Maximum Guitar Sales per Month 4 hrs. 150 guitars 3 hrs. 125 guitars Acoustic 131 guitars 100 guitars 2 hrs. 75 guitars & 50 guitars 1 hrs. 25 guitars O hrs. O guitars Acoustic Electric Acoustic Electric Machine Hours per Guitar Maximum Guitar Sales per Month 4 hrs. 150 guitars 3 hrs. 125 guitars 100 guitars 2 hrs. 75 guitars Electric: 65 guitars 50 guitars 1 hrs. 25 guitars O hrs. O guitars Acoustic Electric Acoustic Electric 1. The company is considering adding a second 8-hour shift for 22 days each month, which would increase fixed costs by $9,000. (a) Compute the most profitable sales mix for the company if it adds a second shift. (b) Should the company add the second shift? Acoustic Electric Total (a) Hours dedicated to the production of each product Units produced for the most profitable sales mix (b) Contribution margin per unit Total contribution margin-two shifts Total contribution margin-one shift Incremental revenue - Change in contribution margin Incremental expense - Change in fixed costs Total incremental income Should the company add another shift? 4
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