8.49this is a follow up on the same question you just answered - i need to know why the highlighted field in the attached section of your solution was divided by 2 and not by 3 (the hours required for Tahoe painting department).Please check and confirm the work to answer parts, 1, 2 and 3 Billings Company produces two products, Product Reno and Product Tahoe. Each product goes through its own assembly and finishing departments. However, both of them must go through the painting department. The painting department has capacity of 2,028 hours per year. Product Reno has a unit contribution margin of $100 and requires four hours of painting department time. Product Tahoe has a unit contribution margin of $78 and requires three hours of painting department time. There are no other constraints.Required:1. What is the contribution margin per hour of painting department time for each product? Contribution MarginReno$Tahoe$2. What is the optimal mix of products? If an amount is zero, enter "0". Optimal MixReno unitsTahoe units3. What is the total contribution margin earned for the optimal mix? ### Contribution Analysis for Production UnitsThis section provides a detailed analysis of the contribution per hour, optimal mix, and contribution margin earned for two production units, Reno and Tahoe.---#### Contribution per Unit and Hours- **Reno:** - Contribution per unit: 100 - Number of hours: 4- **Tahoe:** - Contribution per unit: 78 - Number of hours: 3#### Calculations1. **Contribution per Hour:** - **Reno:** Calculated as `B2/B3` - **Tahoe:** Calculated as `C2/C3`2. **Resource Allocation Constraints:** - Maximum hours in the painting department: 2028 for both Reno and Tahoe - Maximum number of units produced: - **Reno:** Calculated as `B5/B3` - **Tahoe:** Calculated as `C5/C3` 3. **Rank for Production:** - **Reno:** 2 - **Tahoe:** 1---#### Production Analysis- **Note:** Since the number of products produced by Reno is less than Tahoe, the production strategy needs to be optimized accordingly.---#### Optimal Mix (Units)- **Reno:** Recommended optimal mix is 0- **Tahoe:** Calculated as `C5/2`#### Contribution Margin Earned- **Reno:** - Contribution per unit remains at 100 - Contribution margin earned: Calculated as `B11*B13`- **Tahoe:** - Contribution per unit is 78 - Contribution margin earned: Calculated as `C11*C13`This analysis is crucial for optimizing production strategies and maximizing contribution margins, considering the constraints and ranking for each unit.

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Answered: Billings Company produces two products,…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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8.49

this is a follow up on the same question you just answered - i need to know why the highlighted field in the attached section of your solution was divided by 2 and not by 3 (the hours required for Tahoe painting department).

Please check and confirm the work to answer parts, 1, 2 and 3

Billings Company produces two products, Product Reno and Product Tahoe. Each product goes through its own assembly and finishing departments. However, both of them must go through the painting department. The painting department has capacity of 2,028 hours per year. Product Reno has a unit contribution margin of $100 and requires four hours of painting department time. Product Tahoe has a unit contribution margin of $78 and requires three hours of painting department time. There are no other constraints.

Required:

1. What is the contribution margin per hour of painting department time for each product?

	Contribution Margin
Reno	$
Tahoe	$

2. What is the optimal mix of products? If an amount is zero, enter "0".

	Optimal Mix
Reno	units
Tahoe	units

3. What is the total contribution margin earned for the optimal mix?

### Contribution Analysis for Production Units

This section provides a detailed analysis of the contribution per hour, optimal mix, and contribution margin earned for two production units, Reno and Tahoe.

---

#### Contribution per Unit and Hours

- **Reno:**
- Contribution per unit: 100
- Number of hours: 4

- **Tahoe:**
- Contribution per unit: 78
- Number of hours: 3

#### Calculations

1. **Contribution per Hour:**
- **Reno:** Calculated as `B2/B3`
- **Tahoe:** Calculated as `C2/C3`

2. **Resource Allocation Constraints:**
- Maximum hours in the painting department: 2028 for both Reno and Tahoe
- Maximum number of units produced:
- **Reno:** Calculated as `B5/B3`
- **Tahoe:** Calculated as `C5/C3`

3. **Rank for Production:**
- **Reno:** 2
- **Tahoe:** 1

---

#### Production Analysis

- **Note:** Since the number of products produced by Reno is less than Tahoe, the production strategy needs to be optimized accordingly.

---

#### Optimal Mix (Units)

- **Reno:** Recommended optimal mix is 0
- **Tahoe:** Calculated as `C5/2`

#### Contribution Margin Earned

- **Reno:**
- Contribution per unit remains at 100
- Contribution margin earned: Calculated as `B11*B13`

- **Tahoe:**
- Contribution per unit is 78
- Contribution margin earned: Calculated as `C11*C13`

This analysis is crucial for optimizing production strategies and maximizing contribution margins, considering the constraints and ranking for each unit.

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