Edge Company produces two models of its product with the same machine. The machine has a capacity of 172 hours per month. The following information is available. Selling price per unit Variable costs per unit Contribution margin per unit Machine hours per unit Maximum unit sales per month Required: Contribution margin per unit 1. Determine the contribution margin per machine hour for each model Product Contribution Margin Standard 5.230 100 $ 130 Hours dedicated to the production of each product Units produced for most profitable sales mix Contribution margin per unit Total contribution margin 1 hour 650 units Hours dedicated to the production of each product Units produced for most profitable sales mix Contribution margin per unit Total contribution margin Deluve 5.260 154 $ 104 2 hours 250 units Contribution margin per machine hour 2. How many units of each model should the company produce? How much total produce per month? Standard Standard Deluxe bution margin does this mix Deluxe 3. Assume the maximum demand for the Standard model is 90 units (not 650 units) How many units of each model should the company produce? How much total contribution margin does this mix produce per month? Standard Total Deluxe Total

Edge Company produces two models of its product with the same machine. The machine has a capacity of 172 hours per month. The following information is available. Selling price per unit Variable costs per unit Contribution margin per unit Machine hours per unit Maximum unit sales per month Required: Contribution margin per unit 1. Determine the contribution margin per machine hour for each model Product Contribution Margin Standard 5.230 100 $ 130 Hours dedicated to the production of each product Units produced for most profitable sales mix Contribution margin per unit Total contribution margin 1 hour 650 units Hours dedicated to the production of each product Units produced for most profitable sales mix Contribution margin per unit Total contribution margin Deluve 5.260 154 $ 104 2 hours 250 units Contribution margin per machine hour 2. How many units of each model should the company produce? How much total produce per month? Standard Standard Deluxe bution margin does this mix Deluxe 3. Assume the maximum demand for the Standard model is 90 units (not 650 units) How many units of each model should the company produce? How much total contribution margin does this mix produce per month? Standard Total Deluxe Total

Name: Edge Company produces two models of its product with the same machine
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Description: Edge Company produces two models of its product with the same machine. The machine has a capacity of 172 hours per month. Thefollowing information is available.Selling price per unitVariable costs per unitContribution margin per unitMachine hours pe

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter20: Inventory Management: Economic Order Quantity, Jit, And The Theory Of Constraints

Section: Chapter Questions

Problem 3CE: Patz Company produces two types of machine parts: Part A and Part B, with unit contribution margins...

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Patz Company produces two types of machine parts: Part A and Part B, with unit contribution margins of 300 and 600, respectively. Assume initially that Patz can sell all that is produced of either component. Part A requires two hours of assembly, and B requires five hours of assembly. The firm has 300 assembly hours per week. Required: 1. Express the objective of maximizing the total contribution margin subject to the assembly-hour constraint. 2. Identify the optimal amount that should be produced of each machine part and the total contribution margin associated with this mix. 3. What if market conditions are such that Patz can sell at most 75 units of Part A and 60 units of Part B? Express the objective function with its associated constraints for this case and identify the optimal mix and its associated total contribution margin.
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.
Power Corp. makes 2 products: blades for table saws and blades for handsaws. Each product passes through the sharpening machine area, which is the chief constraint during production. Handsaw blades take 15 minutes on the sharpening machine and have a contribution margin per blade of $15. Table saw blades take 20 minutes on the sharpening machine and have a contribution margin per blade of $35. If it is assumed that Power Corp. has 5,000 hours available on the sharpening machine to service a minimum demand for each product of 4,000 units, how much will profits increase if 200 more hours of machine time can be obtained?
Power Corp. makes 2 products: blades for table saws and blades for handsaws. Each product passes through the sharpening machine area, which is the chief constraint during production. Handsaw blades take 15 minutes on the sharpening machine and have a contribution margin per blade of $15. Table saw blades take 20 minutes on the sharpening machine and have a contribution margin per blade of $35. If it is assumed that Power Corp. has 5,000 hours available on the sharpening machine to service a minimum demand for each product of 4,000 units, how many of each product should be made?
Edge Company produces two models of its product with the same machine. The machine has a capacity of 154 hours per month. The following information is available. Selling price per unit Variable costs per unit Contribution margin per unit Machine hours per unit Maximum unit sales per month Required: Contribution margin per unit 노래 Contribution margin per machine hour Standard Hours dedicated to the production of each product Units produced for most profitable sales mix Contribution margin per unit Total contribution margin $ 140 55 1. Determine the contribution margin per machine hour for each model. Product Contribution Margin Hours dedicated to the production of each product Units produced for most profitable sales mix Contribution margin per unit Total contribution margin $85 1 hour 500 units Deluxe $ 170 102 $ 68 2 hours 200 units Standard 2. How many units of each model should the company produce? How much total contribution margin does this mix produce per month? Standard Deluxe…
An organization makes and sells three products, F, G, and H. The products are sold in the proportions F: G:H= 2:1:3. The organization’s fixed costs are $80000 per month and details of the products are as follows.Product Selling price $ per unit Variable cost $ per unitF 22 16G 15 12H 19 13The organization wishes to earn a profit of $52000 next month.Required:Calculate the required sales value of each product in order to achieve this target profit.
Consider the following production and cost data for two products, L and C: Product L Product C Contribution margin per unit Machine minutes needed per unit $120 10 minutes $112 8 minutes A total of 60,000 machine minutes are available each period and there is unlimited demand for each product. What is the largest possible total contribution margin that can be realized each period? Multiple Choice $840,000 $780,000 $720,000
Edge Company produces two models of its product with the same machine. The machine has a capacity of 158 hours per month. The following information is available. Standard Deluxe Selling price per unit $ 160 $ 190 Variable costs per unit 65 114 Contribution margin per unit $ 95 $ 76 Machine hours per unit 1 hour 2 hours Maximum unit sales per month 550 units 200 units Required: 1. Determine the contribution margin per machine hour for each model. Product Contribution Margin Standard Deluxe Contribution margin per unit $95 $76 Machine hours per unit 1 2 Contribution margin per machine hour $95 $38 2. How many units of each model should the company produce? How much total contribution margin does this mix produce per month? Standard Deluxe Total Hours dedicated to the production of each product 1 2 3 Units produced for most profitable sales mix 158 0 Contribution margin per unit 95 76 Total contribution margin…
Colt Company produces two skateboard models. Machine time per unit for Hero is two hours and for Flip is one hour. The machine's capacity is 1,860 hours per year. Colt can sell up to 656 units of Hero and 848 units of Flip per year. Selling prices and variable costs follow. Selling price per unit Variable costs per unit Hero $ 156 52 Flip $ 98 56 (a) Compute the contribution margin per machine hour for each product. Hero Flip Contribution margin per unit Contribution margin per machine hour (b) Determine the best sales mix of products. Hero Flip Total Units produced and sold for most profitable sales mix Hours required to produce most profitable sales mix (c) Compute the total contribution margin for the best sales mix. Hero Flip Total Units produced for most profitable sales mix Contribution margin per unit Total contribution margin
Rossiter Fittings produces two models of pipe fittings for underwater lines. The two models (RF-12 and RF-25) have the following characteristics, as developed by a product cost analyst RF-12 RF-25 $ 527 $367 11,997 $ 387 Selling price per unit Variable cost per unit $ 307 Expected units sold per year 3,483 The total fixed costs per year for the company are $1,118,960. Required: a. What is the anticipated level of profits for the expected sales volumes? b. Assuming that the product mix is the same at the break-even point, compute the break-even point in units. c. The head of marketing agrees with the data provided by the cost analyst but believes that the sales of the RF-12 model will be double in units from what the cost analyst predicts. The head of marketing agrees that the total unit volume is likely to be as predicted by the cost analyst. What would be the break-even point of sales in units using the assumptions of the head of marketing?
Craylon Manufacturing Company produces two products, X and Y. The following information is presented for both products: X Y Selling price per unit $40 $25 Variable cost per unit 25 15 Total fixed costs are $275,000.Required:a. Calculate the contribution margin for each product.b. Calculate breakeven point in units of both X and Y if the sales mix is 3 units of X for every unit of Y.c. Calculate breakeven volume in total dollars if the sales mix is 2 units of X for every 3 units of Y.
Vaughn Manufacturing's contribution margin is $20 per unit for Product A and $35 for Product B. Product A requires 2 machine hours and Product B requires4 machine hours. How much is the contribution margin per unit of limited resource for each product? A B $6.67 $10.00 $8.75 $30.00 $6.67 $30.00 $8.75 $10.00