unland, Inc. produces three types of balloons—small, medium, and large—with the following characteristics: Small Medium Large Selling price per unit $8 $8 $11 Variable cost per unit 3 5 6 Contribution margin per unit $5 $3 $5 Machine hours per unit 1 2.4 3 Demand in units 590 1,010 860 The company has only 2,000 machine hours available each month.How many units of each type of balloon should the company make to maximize its total contribution margin? (Round answers to 0 decimal places, e.g. 5,275.) UnitsSmall Medium Large

Calculate the contribution margin per hour:

Answered: unland, Inc. produces three types of…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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unland, Inc. produces three types of balloons—small, medium, and large—with the following characteristics:

	Small	Medium	Large
Selling price per unit	$8	$8	$11
Variable cost per unit	3	5	6
Contribution margin per unit	$5	$3	$5
Machine hours per unit	1	2.4	3
Demand in units	590	1,010	860

The company has only 2,000 machine hours available each month.

How many units of each type of balloon should the company make to maximize its total contribution margin? (Round answers to 0 decimal places, e.g. 5,275.)

	Units
Small
Medium
Large

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