PROBLEM 3 BABEY Company makes three products with the following characteristics: Product V jk jin Selling...
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PROBLEM 3 BABEY Company makes three products with the following characteristics: Product V jk jin Selling price per unit 10 15 20 Variable cost per unit 6 10 10 Machine hours per unit 2 4 10 The company has capacity of 2,000 machine hours, but there is virtually limited demand for product v of 350 units and product jin of 550 units. in order to maximize total contribution margin, how many units of each product should the company produce for product jk? PROBLEM 4 EAT's Fruit Stand currently sells 60,000 heads of fruits per year for p1 per fruit. EAT is thinking of expanding operations and serving the customer better by purchasing a "slice and dice" machine of fruit into bitesize pieces. EAT expects he will then be able to sell his fruit for P1.70 per head. EAT has prepared the following analysis for each option based on sales of 60,000 heads of fruit : Selling Unsliced Fruit per head per total Variable costs .25 15,000 Fixed costs .30 18,000 Total .55 33,000 selling sliced fruit per head per total variable costs .30 18,000 fixed costs .90 54,000 total 1.20 72,000 assume that eat is currently selling only 50,000 heads of fruit per year instead of 60,000 .under this scenario, what will be eat's increase (decrease) in profit for the year if he chooses to sell it a whole instead of slicing up the fruit problem 5 SOWSEY Company is considering the addition of a new product to its current product lines. The expected cost and revenue data for the product are as follows: Annual sales 250,000 units Selling price per unit P304 Variable costs per unit: Production P125 Selling P49 Avoidable fixed cost per year: Production.. P50,000 Selling.... P75,000 Allocated common corporate costs per year P55,000 If the new product is added, the combined contribution margin of the other existing product lines is expected to drop 65,000per year. total common corporate costs would be unaffected by the decision of whether to add the new product. what is the lowest selling price per unit that could be charged for the new product line and still make an additional p2 income per unit PROBLEM 3 BABEY Company makes three products with the following characteristics: Product V jk jin Selling price per unit 10 15 20 Variable cost per unit 6 10 10 Machine hours per unit 2 4 10 The company has capacity of 2,000 machine hours, but there is virtually limited demand for product v of 350 units and product jin of 550 units. in order to maximize total contribution margin, how many units of each product should the company produce for product jk? PROBLEM 4 EAT's Fruit Stand currently sells 60,000 heads of fruits per year for p1 per fruit. EAT is thinking of expanding operations and serving the customer better by purchasing a "slice and dice" machine of fruit into bitesize pieces. EAT expects he will then be able to sell his fruit for P1.70 per head. EAT has prepared the following analysis for each option based on sales of 60,000 heads of fruit : Selling Unsliced Fruit per head per total Variable costs .25 15,000 Fixed costs .30 18,000 Total .55 33,000 selling sliced fruit per head per total variable costs .30 18,000 fixed costs .90 54,000 total 1.20 72,000 assume that eat is currently selling only 50,000 heads of fruit per year instead of 60,000 .under this scenario, what will be eat's increase (decrease) in profit for the year if he chooses to sell it a whole instead of slicing up the fruit problem 5 SOWSEY Company is considering the addition of a new product to its current product lines. The expected cost and revenue data for the product are as follows: Annual sales 250,000 units Selling price per unit P304 Variable costs per unit: Production P125 Selling P49 Avoidable fixed cost per year: Production.. P50,000 Selling.... P75,000 Allocated common corporate costs per year P55,000 If the new product is added, the combined contribution margin of the other existing product lines is expected to drop 65,000per year. total common corporate costs would be unaffected by the decision of whether to add the new product. what is the lowest selling price per unit that could be charged for the new product line and still make an additional p2 income per unit
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1 To maximize total contribution margin the company should produce as many units of Product jk as possible subject to the constraint on machine hours First calculate the contribution margin per unit a... View the full answer
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