Edge Company produces two models of its product with the same machine. The machine has a capacity of 164 hours per month. The following information is available. StandardDeluxeSelling price per unit$ 190 $ 220 Variable costs per unit80 132 Contribution margin per unit$ 110 $ 88 Machine hours per unit1hour2hoursMaximum unit sales per month550units200unitsRequired: ## Contribution Margin AnalysisThis document provides a structured approach to determine the contribution margin for different product models. It is divided into several sections, each addressing specific analytical questions.### Section 1: Contribution Margin per Machine Hour- **Objective**: Determine the contribution margin per machine hour for each model.- **Details**: - A table is provided with the column headers: "Standard" and "Deluxe". - Rows are labeled as "Contribution margin per unit" and "Contribution margin per machine hour". - Blank fields are present for input data.### Section 2: Units Production for Maximum Profitability- **Objective**: Determine the optimal number of units to produce for maximum profitability and calculate the total contribution margin.- **Details**: - A table is provided with the column headers: "Standard", "Deluxe", and "Total". - Rows include: - "Hours dedicated to the production of each product" - "Units produced for most profitable sales mix" - "Contribution margin per unit" - "Total contribution margin" - Spaces are left empty for data entry.### Section 3: Production Adjustment for Standard Model- **Objective**: Calculate production and contribution margin under conditions where the maximum demand for the Standard model is 80 units (not 550 units).- **Details**: - The same table structure is used as in Section 2, with headers "Standard", "Deluxe", and "Total". - Rows are identical, covering: - "Hours dedicated to the production of each product" - "Units produced for most profitable sales mix" - "Contribution margin per unit" - "Total contribution margin" - Data fields are prepared for user input.This layout facilitates a clear understanding of how production decisions impact financial outcomes, and enables easy comparison between different scenarios for better decision-making.

The product providing highest contribution margin per hour is more profitable and hence, in case of…

dge Company produces two models of its product with the same machine. The machine has a capacity of 164 hours per month. The following information is available. Standard Deluxe Selling price per unit $ 190 $ 220 Variable costs per unit 80 132 Contribution margin per unit $ 110 $ 88 Machine hours per unit 1 hour 2 hours Maximum unit sales per month 550 units 200 units Required:

dge Company produces two models of its product with the same machine. The machine has a capacity of 164 hours per month. The following information is available. Standard Deluxe Selling price per unit $ 190 $ 220 Variable costs per unit 80 132 Contribution margin per unit $ 110 $ 88 Machine hours per unit 1 hour 2 hours Maximum unit sales per month 550 units 200 units Required:

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

	Standard	Deluxe
Selling price per unit	$ 190		$ 220
Variable costs per unit	80		132
Contribution margin per unit	$ 110		$ 88
Machine hours per unit	1	hour	2	hours
Maximum unit sales per month	550	units	200	units

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d
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