Johnson Company makes two products: Carpet Kleen and Floor Deodorizer. Operating information from the previous year follows: Carpet Kleen Floor Deodorizer Units produced and sold 5,000 4,000 Machine hours used 5,000 2,000 Sales price per unit R7 R10 Variable cost per unit R4 R8 Fixed costs of R20,000 per year are presently allocated equally between both products. If the product mix were to change, total fixed costs would remain the same. Assuming there is unlimited demand for both products and Johnson has 10,000 machine hours available, how many units of each product should be produced and sold? Carpet Kleen : units Floor Deodorizer: units
Johnson Company makes two products: Carpet Kleen and Floor Deodorizer. Operating information from the previous year follows: Carpet Kleen Floor Deodorizer Units produced and sold 5,000 4,000 Machine hours used 5,000 2,000 Sales price per unit R7 R10 Variable cost per unit R4 R8 Fixed costs of R20,000 per year are presently allocated equally between both products. If the product mix were to change, total fixed costs would remain the same. Assuming there is unlimited demand for both products and Johnson has 10,000 machine hours available, how many units of each product should be produced and sold? Carpet Kleen : units Floor Deodorizer: units
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Johnson Company makes two products: Carpet Kleen and Floor Deodorizer. Operating information from the previous year follows:
|
|
|
Carpet Kleen |
Floor Deodorizer |
|
Units produced and sold |
|
5,000 |
4,000 |
|
Machine hours used |
|
5,000 |
2,000 |
|
Sales price per unit |
|
R7 |
R10 |
|
Variable cost per unit |
|
R4 |
R8 |
Fixed costs of R20,000 per year are presently allocated equally between both products. If the product mix were to change, total fixed costs would remain the same.
Assuming there is unlimited demand for both products and Johnson has 10,000 machine hours available, how many units of each product should be produced and sold?
Carpet Kleen : units
Floor Deodorizer: units
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