Table 7.5A company makes four products that have the following characteristics: Product A sells for $50 but needs $10 ofmaterials to produce; Product B sells for $75 but needs $30 of materials to produce; Product C sells for $100 butneeds $50 of materials to produce; Product D sells for $150 but needs $75 of materials to produce. The processingrequirements for each product on each of the four machines are shown in the table.product (process time/unit)ABCDWork centerW6312X910484y129Z10711Work centers W, X, Y, and Z are available for 40 hours per week and have no setup time when switching betweenproducts. Market demand for each product is 80 units per week. In the questions that follow, the full cost method refersto maximizing the gross margin or product margin per unit for each product, the contribution margin approach refers tomaximizing the contribution margin per unit for each product, and the bottleneck method refers to maximizing thethroughput contribution margin for each product. Assume all products start at machine W then are processed in orderat X, Y and Z. Assume each worker works one 40 hour shift per week and is paid $10 per hour. Further, weeklyoverhead for the plant is $6000. During your calculations, carry all work to three decimal placesUse the information in Table 7.5.Based on throughput contribution margin and assuming direct labor is a relevant and variable cost, which product isthe most profitable?0000COUP

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A company makes four products that have the following characteristics: Product A sells for $50 but needs $10 of materials to produce; Product B sells for $75 but needs $30 of materials to produce; Product C sells for $100 but needs $50 of materials to produce; Product D sells for $150 but needs $75 of materials to produce. The processing requirements for each product on each of the four machines are shown in the table. product (process time/unit)

A company makes four products that have the following characteristics: Product A sells for $50 but needs $10 of materials to produce; Product B sells for $75 but needs $30 of materials to produce; Product C sells for $100 but needs $50 of materials to produce; Product D sells for $150 but needs $75 of materials to produce. The processing requirements for each product on each of the four machines are shown in the table. product (process time/unit)

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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