Calculator Company makes two specialty calculators, large keys & display, swipe keys Demand is so high...

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Calculator Company makes two specialty calculators, large keys & display, swipe keys Demand is so high for the product, that they sell all that they can make of either calculator. They are limited in production to machine hours (both calculators use the same machinery) until more machines arrive. There is only 33,000 hours of machine time per year. Fixed costs are $160,000 annually. Information for each unit is as follows. Large Numbers/Display Swipe Keys Sales Price per unit $15.00 $22.00 Variable Cost per unit 2.20 3.30 Machine hours per unit 1.25 3.00 1. Compute the contribution margin per unit per machine hour Large Numbers/Display Swipe Keys Sales price per unit -Variable Cost per unit =Contribution Margin per unit + machine hours required = Contribution Margin per machine hour 2. Given the constraint, which product should they make exclusively until the machines arrive and why. 3. If the unit with the highest contribution margin is produced exclusively, how many units can be produced? Total Available hours. /time required to make 1 unit Units can be made 4. Compute the expected profits if the unit with the highest contribution margin per machine hour is produced exclusively (use the chart below to show your work) Computation Sales Revenue -Variable Costs =Contribution Margin -Fixed Costs =Profit 5. If it was required that at least 1,000 units had to be made of each item, compute the charts below: Total hours in a year -time required to produce 1,00 units of the less profitable item =hours remaining to produce the more profitable item +time required to produce 1 unit of the more profitable item = # of units that can be produced of the more profitable item 6. Complete the chart if 1,000 units of the less profitable items are made. Quantity to produce Large Swipe Total Sales revenue Variable Cost =Contribution Margin -Fixed Costs =Profit Calculator Company makes two specialty calculators, large keys & display, swipe keys Demand is so high for the product, that they sell all that they can make of either calculator. They are limited in production to machine hours (both calculators use the same machinery) until more machines arrive. There is only 33,000 hours of machine time per year. Fixed costs are $160,000 annually. Information for each unit is as follows. Large Numbers/Display Swipe Keys Sales Price per unit $15.00 $22.00 Variable Cost per unit 2.20 3.30 Machine hours per unit 1.25 3.00 1. Compute the contribution margin per unit per machine hour Large Numbers/Display Swipe Keys Sales price per unit -Variable Cost per unit =Contribution Margin per unit + machine hours required = Contribution Margin per machine hour 2. Given the constraint, which product should they make exclusively until the machines arrive and why. 3. If the unit with the highest contribution margin is produced exclusively, how many units can be produced? Total Available hours. /time required to make 1 unit Units can be made 4. Compute the expected profits if the unit with the highest contribution margin per machine hour is produced exclusively (use the chart below to show your work) Computation Sales Revenue -Variable Costs =Contribution Margin -Fixed Costs =Profit 5. If it was required that at least 1,000 units had to be made of each item, compute the charts below: Total hours in a year -time required to produce 1,00 units of the less profitable item =hours remaining to produce the more profitable item +time required to produce 1 unit of the more profitable item = # of units that can be produced of the more profitable item 6. Complete the chart if 1,000 units of the less profitable items are made. Quantity to produce Large Swipe Total Sales revenue Variable Cost =Contribution Margin -Fixed Costs =Profit

Answer rating: 100% (QA)

1 Contribution margin per machine hour Particulars Large numberDisplay Swipe keys Sales price per un... View the full answer