Waterways packages some of its products into sets for home installations. One set (small) sells for $77
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Waterways packages some of its products into sets for home installations. One set (small) sells for $77 with variable costs of production for the set at $50. Another set (large) sells for $152 with variable costs of $100. The parts for the $77 set take 9 machine hours to produce. The parts for the $150 set take 20 machine hours to produce.
Given the information above, and assuming all of the package sets produced can be sold each month, illustrate the best use of machine hours.
Contribution margin per unit of limited resource
Small Set ________________
Large Set________________
Contribution MarginContribution margin is an important element of cost volume profit analysis that managers carry out to assess the maximum number of units that are required to be at the breakeven point. Contribution margin is the profit before fixed cost and taxes...
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Related Book For
Managerial Accounting Tools for Business Decision Making
ISBN: 978-1118033890
3rd Canadian edition
Authors: Jerry J. Weygandt, Paul D. Kimmel, Donald E. Kieso, Ibrahim M. Aly
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