9. BEST PRODUCT COMBINATIONKapos Company produces products A, B and C. One machine is used to produce the products. Thesales demands, contribution margins and time on the machine (in hours) are as follows:Market Limit Unit Contribution Margin100 unitsP 20Hours on Machine10 per unit5 per unit10 per unit80 units150 unitsThere are 2,400 hours available on the machine during the week. Total fixed cost is P 3,000.REQUIRED:A) What is the best product combination that maximizes the weekly contribution?a.90 units of A; 0 unit of B; 150 units of Cb.50 units of A; 80 units of B; 150 units of CABсP 18P 25C.100 units of A; 80 units of B; 100 units of Cd. 100 units of A; 80 units of B; 150 units of CB) How much is the profit associated with the best product combination?10. LINEAR PROGRAMMINGITZY Company has an available 120 grams of Material 1 and 80 liters of Material 2 to produce its productsA and B:Unit Contribution MarginRequired Materials:Material 1Material 2Product AP32 grams4 litersProduct BP45 grams2 litersREQUIRED:A) Objective function - involving maximization of the company's contribution margin.B) Non-negativity constraint functionC) Constraint function for Material 1D) Constraint function for Material 2E) Optimal product mix

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Answered: 9. BEST PRODUCT COMBINATION Kapos…

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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Bridgeport Company manufactures and sells two products. Relevant per-unit data concerning each product follow: Selling price Variable costs Machine hours Product Basic $43.00 $19.00 0.50 Show Transcribed Text Calculate the contribution margin per machine hour for each product. Question Part Score Contribution margin per machine hour $ Basic eTextbook and Media Deluxe Deluxe $52.00 $23.30 Bridgeport should manufacture the Basic 0.70 If 1,800 additional machine hours are available, which product should Bridgeport manufacture? - Show Transcribed Text Total contribution margin $ Basic Prepare an analysis showing the total contribution margin if 1,800 additional hours are: (1) Divided equally between the products. product. $ Deluxe Total contribution margin $ (2) Allocated entirely to the product identified in part (b).
Consider the following production and cost data for two products, Big and Little: Big Little Demand in units 8,000 10,000 Contribution margin per unit $24 $18 Machine-hours needed per unit 2 MH 3 MH Labor hours needed per unit 6 DLH 4 DLH The company has 36,000 direct labor hours available each period. What is the maximum number of Littles that should be made each period? O 10,000 O 4,000 O 9,000
The Varone Company makes a single product called a Hom. The company has the capacity to produce 40,000 Homs per year. Per unit costs to produce and sell one Hom at that activity level are: Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead Variable selling expense Fixed selling expense S $20 $10 $5 $7 O $23,200 decrease $27,000 Increase $50,800 Increase O $63,000 Increase $10 $8 The regular selling price for one Hom is $60. A special order has been received at Varone from the Fairview Company to purchase 6,300 Homs next year at 20% off the regular selling price. If this special order were accepted, the variable selling expense would be reduced by 30%. However, Varone would have to purchase a specialized machine to engrave the Fairview name on each Hom in the special order. This machine would cost $10,800 and it would have no use after the special order was filled. The total fixed costs, both manufacturing and selling, are constant within the…
SAMMI Manufacturing has two divisions. Division A makes a part with the following characteristics: Production capacity in units 15,000 units Selling price to outside customers .. Variable cost per unit........ £25 £18 £60,000 Total fixed costs Division B, of the same company, would like to purchase 5,000 units of the part each period from Division A. Division B is now purchasing these parts from an outside supplier at a price of £24 each. Suppose that Division A has ample idle capacity to handle all of Division B's needs without any increase in fixed costs and without cutting into sales to outside customers. If Division B continues to purchase parts from an outside supplier rather than from Division A, the company as a whole will be: a. b. C. d Better off by £15,000 each period. Worse off by £10,000 each period. Worse off by £30,000 each period. Worse off by £35,000 each period.
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 Cootribution Margin Standard $ 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 $ 260 156 $ 104 2 hours 250 units Standard Contribution margin per machine hour 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…
Spartans Inc. has the following Standard Cost Card: per unit per year Price $21.00 Direct Materials $6.00 Direct Labor $1.80 Var. MOH $0.80 Fixed MOH $36,000 Selling $2.00 Administrative $60,000 1. What is the contribution margin per unit? $8.60, $2.99, $7.59, $10.60, or $4.99 2. What is the contribution margin ratio? 0.3672, 0.6328, 0.7800, 0.2200, or 0.4415 3. Based on your answer from (b), how much of every $1.00 of sales represents variable costs? 4. If direct labor costs increase by $1.00, how will that affect the contribution margin?
A manager must decide which type of machine to buy, A, B, or C. Machine costs (per individual machine) are as follows: Machine Cost A $ 60,000 B $ 50,000 C $ 60,000 Product forecasts and processing times on the machines are as follows: PROCCESSING TIME PER UNIT (minutes) Product AnnualDemand A B C 1 16,000 3 4 4 2 10,000 6 5 1 3 15,000 1 3 6 4 17,000 5 3 4 a. Assume that only purchasing costs are being considered. Compute the total processing time required for each machine type to meet demand, how many of each machine type would be needed, and the resulting total purchasing cost for each machine type. The machines will operate 10 hours a day, 240 days a year. (Enter total processing times as whole numbers. Round up machine quantities to the next higher whole number. Compute total purchasing costs using these rounded machine quantities. Enter the resulting total purchasing cost as a whole number. Omit the "$" sign.) Total…
Smith Company can produce two types of carpet cleaners, Brighter and Cleaner. Data on these two products are as follows: Sales volume in units Brighter 400 Cleaner 600 Unit sales price Unit variable cost $ 1,000 200 $ 1,000 700 The number of machine hours to produce one unit of Brighter is 1, while the number of machine hours for each unit of Cleaner is 2. Total fixed costs for the manufacture of both products are $290,000. Required: 1. Determine the breakeven point in total units for Smith Company, based on the assumption that the sales mix (on the basis of relative sales volume in units) remains constant. Use the weighted-average contribution margin approach. 2. At this breakeven level, how many units of each product must be sold? Due to rounding, the total breakeven units for Requirement 2 may differ slightly than in Requirement 1. 3. Using the Indirect approach, what is the overall breakeven point in sales dollars? Use the breakeven units computed in Requirement 1. Complete this…
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…
Wheel and Tire Manufacturing currently produces 1,000 tires per month. The following per unit data apply for sales to regular customers: Direct materials Direct manufacturing labor Variable manufacturing overhead Fixed manufacturing overhead Total manufacturing costs Select one: The plant has capacity for 3,000 tires and is considering expanding production to 2,000 tires. What is the total cost of producing 2,000 tires? a. $39,000 b. $78,000 C. 1. $62,000 $20 3 d. they are all wrong 6 10 $39
Olsen Company produces two products. Product A has a contribution margin of $30 and requires 10 machine hours. Product B has a contribution margin of $24 and requires 4 machine hours. Determine the more profitable product assuming the machine hours are the constraint. Unit contribution margin per bottleneck hour:Product A $_____Product B $_____ Product ____ is most profitable.
Division X makes a part with the following characteristics: Production capacity.. 25,000 units $18 Selling price to outside customers. Variable cost per unit. $11 Fixed cost, total. $100,000 Division Y of the same company would like to purchase 10,000 units each period from Division X. Division Y now purchases the part from an outside supplier at a price of $17 each. Suppose that Division X is operating at capacity and can sell all of its output to outside customers. If Division X sells the parts to Division Y at $17 per unit, the company as a whole will be: Select one: a. better off by $10,000 each period. b. worse off by $20,000 each period. C. worse off by $10,000 each period. d. There will be no change in the status of the company as a whole.

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