ABC Corp. makes products Alpha and Beta. Both products makes use of the same equipment. The following
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ABC Corp. makes products Alpha and Beta. Both products makes use of the same equipment. The following were provided to you with regard to these products in preparation for its budget next year.
PESO PER UNIT DATA | ALPHA | BETA | ||
At 10, 000 units | At 12, 500 units | At 5,000 units | At 8,000 units | |
Selling Price | 100 | 100 | 250 | 250 |
Less: Costs | 70 | 62 | 230 | 170 |
Profit | 30 | 38 | 20 | 80 |
Other information are as follows:
ALPHA | BETA | |
Expected market next year | 10,000 units | 6, 000 units |
Required machine hours per unit | 2 | 3 |
Total available machine hours | 20, 000 |
- What is the contribution margin of Alpha if ABC was able to optimize the use of the machine hours?
- How many units of Beta should be produced to maximize profits?
Related Book For
Managerial accounting
ISBN: 978-0471467854
1st edition
Authors: ramji balakrishnan, k. s i varamakrishnan, Geoffrey b. sprin
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