A company can sell all the units it can produce of either Product A or Product B but not both. Product A has a unit contribution margin of $16 and takes two machine hours to make and Product B has a unit contribution margin of $30 and takes three machine hours to make. If there are 5,000 machine hours available to manufacture a product, income will be Group of answer choices the same if either product is made. $10,000 more if Product A is made. $10,000 less if Product B is made. $10,000 less if Product A is made.

A company can sell all the units it can produce of either Product A or Product B but not both. Product A has a unit contribution margin of $16 and takes two machine hours to make and Product B has a unit contribution margin of $30 and takes three machine hours to make. If there are 5,000 machine hours available to manufacture a product, income will be Group of answer choices the same if either product is made. $10,000 more if Product A is made. $10,000 less if Product B is made. $10,000 less if Product A is made.

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 58P: Polaris Inc. manufactures two types of metal stampings for the automobile industry: door handles and...

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Reubens Deli currently makes rolls for deli sandwiches it produces. It uses 30,000 rolls annually in the production of deli sandwiches. The costs to make the rolls are: A potential supplier has offered to sell Reuben the rolls for $0.90 each. If the rolls are purchased, 30% of the fixed overhead could be avoided, If Reuben accepts the offer, what will the effect on profit be?
Dimitri Designs has capacity to produce 30,000 desk chairs per year and is currently selling all 30,000 for $240 each. Country Enterprises has approached Dimitri to buy 800 chairs for $210 each. Dimitris normal variable cost is $165 per chair, including $50 per unit in direct labor per chair. Dimitri can produce the special order on an overtime shift, which means that direct labor would be paid overtime at 150% of the normal pay rate. The annual fixed costs will be unaffected by the special order and the contract will not disrupt any of Dimitris other operations. What will be the impact on profits of accepting the order?
Maplewood can sell all the units it can produce of either Product A or Product B but not both. Product A has a unit contribution margin of $16 and takes two machine hours to make and Product B has a unit contribution margin of $30 and takes three machine hours to make. If there are 5,000 machine hours available to manufacture a product, income will be $10,000 less if Product A is made $10,000 more if Product A is made. the same if either product is made O $10,000 less if ProductB is made.
Parker Co. can further process Product J to produce Product D. Product J is currently selling for $21 per pound and costs $15.75 per pound to produce. Product D would sell for $35 per pound and would require an additional cost of $8.75 per pound to produce. What is the net differential income of producing Product D? $7 per pound $8.75 per pound $15 per pound $5.25 per pound
Clockmaker Ltd. makes a product called wallet. Managers from Clockmaker Ltd. want to achieve a profit of £82, 800. The wallet price equals £82 per unit. Each unit of wallet has a cost of £36 and annual total fixed costs equal £147, 200. Considering this information, which of the following statements is true? O a. To achieve the desired profit, Clockmaker Ltd. needs to sell 5, 000 units of wallet. O b. Clockmaker Ltd. would need to sell more than 3, 200 units of wallet to have positive profits. O c. Contribution per unit equals £46. O d. All the answers are true.
Carla Vista Company is able to currently sell all of the units that it can produce of either A132 or B345. If Unit A132 has a unit contribution margin of $60 and it takes three machine hours to produce and Unit B345 has a unit contribution margin of $48 and takes two machine hours to produce. If Carla Vista Company has a constraint on machine hours, and currently has only 1440 machines of production time, which should Carla Vista produce to maximize the operating income of the company? O Make Unit B345 which creates $4 more profit per machine hour than Unit A132 does. O The same total profits exist regardless of which product is made. O Make Unit B345 because more units can be made and sold than Unit A132. O Make Unit A132 which creates $12 more profit per unit than Unit B345 does.
Madlock, Inc. sells a product with a contribution margin of $10 per unit. Fixed costs are $1,800 per month. How many units must Madlock sell to break even? Begin by showing the formula and then entering the amounts to calculate the units Madlock must sell to break even. (Abbreviation used: CM = contribution margin. Complete all input fields. Enter a "0" for items with a zero value.) Target profit ) = Fixed costs ▼ + + HH CM per unit TOD Carmen Required sales in units
Wheeler Company can produce a product that incurs the following costs per unit: direct materials, $9.10; direct labor, $23.10, and overhead, $15.10. An outside supplier has offered to sell the product to Wheeler for $42.56. If Wheeler buys from the supplier, it will still incur 40% of its overhead cost. Compute the net incremental cost or savings of buying. Multiple Choice $3.75 savings per unit. $1.30 cost per unit. $1.30 savings per unit. $3.75 cost per unit. $4.32 cost per unit.
Grace Co. can further process Product B to produce Product C. Product B is currently selling for $20 per pound and costs $15 per pound to produce. Product C would sell for $40 per pound and would require an additional cost of $10 per pound to produce. The differential revenue of producing and selling Product C is a. $30 per pound b. $40 per pound c. $25 per pound d. $20 per pound
Ptarmigan Company produces two products. Product A has a contribution margin of $65.00 and requires 10 machine hours. Product B has a contribution margin of $46.20 and requires 7 machine hours. Determine the most profitable product assuming the machine hours are the constraint. If required, round your answers to two decimal places. Contribution margin per machine hour: Product A $ Product B $ Product is the most profitable.
Use this information for Carmen Co. to answer the question that follow. Carmen Co. can further process Product J to produce Product D. Product J is currently selling for $23.05 per pound and costs $14.35 per pound to produce. Product D would sell for $40.95 per pound and would require an additional cost of $10.35 per pound to produce. What is the differential cost of producing Product D? a.$6.21 per pound b.$10.35 per pound c.$12.42 per pound d.$8.28 per pound
Carmen Co. can further process Product J to produce Product D. Product J is currently selling for $19.20 per pound and costs $14.60 per pound to produce. Product D would sell for $37.80 per pound and would require an additional cost of $8.90 per pound to produce. The differential cost of producing Product D is a.$10.68 per pound b.$7.12 per pound c.$5.34 per pound d.$8.90 per pound Yasmin Co. can further process Product B to produce Product C. Product B is currently selling for $31 per pound and costs $26 per pound to produce. Product C would sell for $59 per pound and would require an additional cost of $22 per pound to produce. The differential cost of producing Product C is a.$59 per pound b.$22 per pound c.$31 per pound d.$26 per pound