PRODUCT MIX DECISION 8. ELEMENTAL HERO CORP. makes three products in a single facility. Data concerning these products follow: Product C P63.30 Product A P64.50 P20.90 P30.80 P1.60 P1.00 3.50 4,000 Product B P64.80 Selling price per unit Direct materials Direct labor Variable manufacturing overhead Variable selling cost per unit Mixing minutes per unit Monthly demand in units The mixing machines are potentially the constraint in the production facility. A total of 32,400 minutes are available per month on these machines. Direct labor is a variable cost in this company. REQUIREMENTS: Hn mar P18.30 P26.00 P2.10 P1.50 3.50 4,000 P14.50 P33.40 P1.90 P3.40 3.10 2,000 527 -.. How many units of each product should be produced to maximize net operating income? (Round off to the nearest whole unit.) What is the expected total contribution margin of ELEMENTAL HERO if it will follow the proposed (c) (d) action maximizing its net income? (e) Up to how much should the company be willing to pay for one additional hour of mixing machine time if the company has made the best use of the existing mixing machine capacity?

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
icon
Concept explainers
Topic Video
Question
PRODUCT MIX DECISION
ELEMENTAL HERO CORP. makes three products in a single facility. Data concerning these products
follow:
Product A
P64.50
P20.90
P30.80
P1.60
Product B
P64.80
P14.50
P33.40
P1.90
Product C
Selling price per unit
Direct materials
Direct labor
Variable manufacturing overhead
Variable selling cost per unit
Mixing minutes per unit
Monthly demand in units
The mixing machines are potentially the constraint in the production facility. A total of 32,400 minutes
are available per month on these machines. Direct labor is a variable cost in this company.
REQUIREMENTS:
Hnw ma
P63.30
P18.30
P26.00
P2.10
P1.50
P1.00
3.50
4,000
P3.40
3.10
2,000
3.50
4,000
How many units of each product should be produced to maximize net operating income? (Round
(C)
off to the nearest whole unit.)
(d)
What is the expected total contribution margin of ELEMENTAL HERO if it will follow the proposed
action maximizing its net income?
(e) Up to how much should the company be willing to pay for one additional hour of mixing machine
time if the company has made the best use of the existing mixing machine capacity?
Transcribed Image Text:PRODUCT MIX DECISION ELEMENTAL HERO CORP. makes three products in a single facility. Data concerning these products follow: Product A P64.50 P20.90 P30.80 P1.60 Product B P64.80 P14.50 P33.40 P1.90 Product C Selling price per unit Direct materials Direct labor Variable manufacturing overhead Variable selling cost per unit Mixing minutes per unit Monthly demand in units The mixing machines are potentially the constraint in the production facility. A total of 32,400 minutes are available per month on these machines. Direct labor is a variable cost in this company. REQUIREMENTS: Hnw ma P63.30 P18.30 P26.00 P2.10 P1.50 P1.00 3.50 4,000 P3.40 3.10 2,000 3.50 4,000 How many units of each product should be produced to maximize net operating income? (Round (C) off to the nearest whole unit.) (d) What is the expected total contribution margin of ELEMENTAL HERO if it will follow the proposed action maximizing its net income? (e) Up to how much should the company be willing to pay for one additional hour of mixing machine time if the company has made the best use of the existing mixing machine capacity?
Expert Solution
steps

Step by step

Solved in 5 steps

Blurred answer
Knowledge Booster
Costing Systems
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education