Blossom Corporation produces three products, Standard, Deluxe and Superior, with the following characteristics: Selling price per unit Variable cost per unit Contribution margin per unit Machine hours per unit Standard Deluxe Superior $20 14 $6 2 $22 17 $5 2 $21 O Standard first, Deluxe second, Superior third O Deluxe first. Standard second, Superior third O Superior first, Standard second, Deluxe third O Standard first, Superior second, Deluxe third 19 $2 2 ► The company has only 1810 machine hours available each period. If demand exceeds the company's capacity, in what sequence should orders for the three products be filled to maximize the company's total contribution margin?
Blossom Corporation produces three products, Standard, Deluxe and Superior, with the following characteristics: Selling price per unit Variable cost per unit Contribution margin per unit Machine hours per unit Standard Deluxe Superior $20 14 $6 2 $22 17 $5 2 $21 O Standard first, Deluxe second, Superior third O Deluxe first. Standard second, Superior third O Superior first, Standard second, Deluxe third O Standard first, Superior second, Deluxe third 19 $2 2 ► The company has only 1810 machine hours available each period. If demand exceeds the company's capacity, in what sequence should orders for the three products be filled to maximize the company's total contribution margin?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:Blossom Corporation produces three products, Standard, Deluxe and Superior, with the following characteristics:
Selling price per unit
Variable cost per unit
Contribution margin
per unit
Machine hours per unit
Standard Deluxe Superior
$20
14
$6
2
$22
17
$5
2
$21
O Standard first, Deluxe second, Superior third
O Deluxe first. Standard second, Superior third
O Superior first, Standard second, Deluxe third
O Standard first, Superior second, Deluxe third
19
$2
2
The company has only 1810 machine hours available each period. If demand exceeds the company's capacity, in what sequence should
orders for the three products be filled to maximize the company's total contribution margin?

Transcribed Image Text:Sandhillindustries manufactures light fixtures for home, retail, and industrial customers. The Petall line has been
several years, and management is considering dropping the line. Recent income statements have been very similar to the following
information which was prepared for the most recent year.
Sales
Variable costs
Contribution
margin
Fixed costs
Operating income
Home
O $77300
O $99600
O $23600
O $(6400)
$551000
358800
192200
126000
$66200
Retail
$321000
218700
102300
131000
$(28700)
Industrial
$831000
681600
149400
116000
$33400
Total
$1703000
1259100
443900
373000
$70900
►
Of the fixed costs, $318000 of it is common costs that have been allocated equally to each product line. What will total operating
income be if Sandhill drops the retail line?
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