K ces Edge Company produces two models of its product with the same machine. The machine has a capacity of 148 hours per month. The following information is available. Selling price per unit Variable costs per unit Contribution margin per unit Machine hours per unit. Maximum unit sales per month Required: Contribution margin per unit Standard $ 110 40 $70 1. Determine the contribution margin per machine hour for each model. Product Contribution Margin 1 hour 500 units Hours dedicated to the production of each product Units produced for most profitable sales mix Contribution margin per unit Total contribution margin Deluxe $ 140 84 $ 56 2 hours 250 units Standard Contribution margin per machine hour 2. How many units of each model should the company produce? How much total contribution margin does the mix produce per month? Standard 111 Deluxe Next Deluxe Total

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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K
ces
Edge Company produces two models of its product with the same machine. The machine has a capacity of 148 hours per
month. The following information is available.
Selling price per unit
Variable costs per unit
Contribution margin per unit
Machine hours per unit
Maximum unit sales per month
Required:
Contribution margin per unit
1. Determine the contribution margin per machine hour for each model.
Product Contribution Margin
Contribution margin per machine hour
Standard
$ 110
40
$70
Hours dedicated to the production of each product
Units produced for most profitable sales mix
1 hour
500 units
Contribution margin per unit
Total contribution margin
Deluxe
$ 140
84
$56
< Prev
mix
2. How many units of each model should the company produce? How much total contribution margin does this m
produce per month?
Standard
Deluxe
Total
2 hours
250 units
11 of 11
Standard
Deluxe
Next
Transcribed Image Text:K ces Edge Company produces two models of its product with the same machine. The machine has a capacity of 148 hours per month. The following information is available. Selling price per unit Variable costs per unit Contribution margin per unit Machine hours per unit Maximum unit sales per month Required: Contribution margin per unit 1. Determine the contribution margin per machine hour for each model. Product Contribution Margin Contribution margin per machine hour Standard $ 110 40 $70 Hours dedicated to the production of each product Units produced for most profitable sales mix 1 hour 500 units Contribution margin per unit Total contribution margin Deluxe $ 140 84 $56 < Prev mix 2. How many units of each model should the company produce? How much total contribution margin does this m produce per month? Standard Deluxe Total 2 hours 250 units 11 of 11 Standard Deluxe Next
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