FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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8.49-confirmation
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 2,028 hours per year. Product Reno has a unit contribution margin of $100 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? If an amount is zero, enter "0".
| Optimal Mix | |
| Reno | units |
| Tahoe | units |
3. What is the total contribution margin earned for the optimal mix?
$
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The following calculations are done to show the production of two product lines by Billing Co.
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