Containers Galore sells two products with information as follows:Small containers:Price per unit - P12Variable cost per unit - P10Large containers:Price per unit - P20Variable cost per unit - P12Products are made by machines. 4 small containers can be made with one machine hour and 2large containers can be made with one machine hour. The company has a maximum of 3,000machine hours available per month. Assume there are no constraints on sales of either product,and the company could choose any product mix they wish. What is the maximum amount ofcontribution margin that the company could earn in a month?

When there are multiple products but only one key factor:- Step 1: Rank the product on the basis of…

Answered: Containers Galore sells two products…

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter7: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 62P

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Polaris Inc. manufactures two types of metal stampings for the automobile industry: door handles and trim kits. Fixed cost equals 146,000. Each door handle sells for 12 and has variable cost of 9; each trim kit sells for 8 and has variable cost of 5. Required: 1. What are the contribution margin per unit and the contribution margin ratio for door handles and for trim kits? 2. If Polaris sells 20,000 door handles and 40,000 trim kits, what is the operating income? 3. How many door handles and how many trim kits must be sold for Polaris to break even? 4. CONCEPTUAL CONNECTION Assume that Polaris has the opportunity to rearrange its plant to produce only trim kits. If this is done, fixed costs will decrease by 35,000, and 70,000 trim kits can be produced and sold. Is this a good idea? Explain.
Santora Company manufactures two products—toaster ovens and bread machines. The following data are available: Toaster Ovens Bread Machines Sales price $70 $170 Variable costs $50 $70 Santora can manufacture six toaster ovens per machine hour and four bread machines per machine hour. Santora's production capacity is 1600 machine hours per month, and it can sell as many units of either type as it can produce. Which product and how many units should the company produce in a month to maximize profits? (Round machine hour per unit to two decimal places and your final answer to the nearest whole dollar.)
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Robinsons Company makes three products, all of which require the use of a special machine. Only 200 hours of machine time are available per month. Data for the three products are as a follow. Winston can sell as much of any product as it can make. Product 1 Product 2 Product 3 Selling Price P12 P16 P21 Variable Cost 7 8 10 Contribution Margin P5 P8 P11 Machine time required in min. 6 10 15 Required: Which product should be produced to maximize profits? Given the capacity constraint, determine which product the company should make and what total monthly contribution margin the company would earn by making only that product. How much would the selling price of the next most profitable (per machine hour) product have to rise to be as profitable as the product you selected in item 2?
unland, Inc. produces three types of balloons—small, medium, and large—with the following characteristics: Small Medium Large Selling price per unit $8 $8 $11 Variable cost per unit 3 5 6 Contribution margin per unit $5 $3 $5 Machine hours per unit 1 2.4 3 Demand in units 590 1,010 860 The company has only 2,000 machine hours available each month.How many units of each type of balloon should the company make to maximize its total contribution margin? (Round answers to 0 decimal places, e.g. 5,275.) Units Small Medium Large
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Gotcha Covered manufactures and sells leather cases for cell phones. Each case sells for $80. Variable manufacturing costs are $30 per case. We pay a sales commission of 10% of the selling price to our salespeople. Fixed manufacturing costs are $200,000 and fixed operating costs are $35,000. Calculate the following amounts: a. b. C. ii. iii. iv. V. Target quantity if we want to generate Operating Income = $100,000 Neatly draw a CVP Chart. Be sure to label everything relevant. We currently produce and sell 10,000 cases. i. What is our expected Operating Income? How much is our Margin of Safety in units and dollars? Prepare an Income Statement (through Oper Inc) using the GM format. Prepare an Income Statement (through Oper Inc) using the CM format. Our plant manager suggested we purchase a new machine which will lower our labor costs. This change will increase Fixed Costs by $30,000 and reduce Variable Cost per Unit by $5. Calculate the new Breakeven Quantity and new expected Operating…
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The company sells two types of hats: knit and hard Knit sells at $15 a hat with a $5 variable costHard sells at $25 a hat with $10 variable cost Knit hats comprise 80% of all salesFixed costs are $22,000 How many Knit hats & Hard hats must be sold to break even? Please be detailed that I might study the process.

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