The following are the selling price, variable costs, and contribution margin for one unit of each...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
The following are the selling price, variable costs, and contribution margin for one unit of each of Banner Company's three products: A, B, and C Selling price Variable costs: Direct materials Direct labour Variable manufacturing overhead Total variable cost Contribution margin Contribution margin ratio A $70.00 Contribution margin per labour hour 30.50 12.00 3.00 45.50 $24.50 A 35% Product B $130.00 B 51.00 32.00 8.00 91.00 $39.00 Due to a strike in the plant of one of its competitors, demand for the company's products far exceeds its capacity to produce. Management is trying to determine which product(s) to concentrate on next week in filling its backlog of orders. The direct labour rate is $8 per hour, and only 3,850 hours of labour time, are available each week. Required: 1. Compute the amount of contribution margin that will be obtained per hour of labour time spent on each product. (Round your intermediate calculations to 1 decimal place. Round your answers to 2 decimal places.) 30% $ 8.52 $ 11.70 $ C C $180.00 114.00 24.00 6.00 144.00 $36.00 20% 7.20 2. Which orders would you recommend that the company work on next week-the orders for product A, product B, or product C? The following are the selling price, variable costs, and contribution margin for one unit of each of Banner Company's three products: A, B, and C Selling price Variable costs: Direct materials Direct labour Variable manufacturing overhead Total variable cost Contribution margin Contribution margin ratio A $70.00 Contribution margin per labour hour 30.50 12.00 3.00 45.50 $24.50 A 35% Product B $130.00 B 51.00 32.00 8.00 91.00 $39.00 Due to a strike in the plant of one of its competitors, demand for the company's products far exceeds its capacity to produce. Management is trying to determine which product(s) to concentrate on next week in filling its backlog of orders. The direct labour rate is $8 per hour, and only 3,850 hours of labour time, are available each week. Required: 1. Compute the amount of contribution margin that will be obtained per hour of labour time spent on each product. (Round your intermediate calculations to 1 decimal place. Round your answers to 2 decimal places.) 30% $ 8.52 $ 11.70 $ C C $180.00 114.00 24.00 6.00 144.00 $36.00 20% 7.20 2. Which orders would you recommend that the company work on next week-the orders for product A, product B, or product C?
Expert Answer:
Answer rating: 100% (QA)
To compute the amount of contribution margin obtained per hour of labor time spent on each product we need to divide the contribution margin by the la... View the full answer
Related Book For
Managerial Accounting
ISBN: 978-1259024900
9th canadian edition
Authors: Ray Garrison, Theresa Libby, Alan Webb
Posted Date:
Students also viewed these accounting questions
-
Analyse a portfolio of loans consisting of 3 companies of your choice with characteristics shown in table below. For example, if you choose company 1 to be Tesla, it will have a maturity of 5 years,...
-
The following are the selling price, variable costs, and contribution margin for one unit of each of Banner Companys three products: A, B, and C: Due to a strike in the plant of one of its...
-
Record the following transactions in Journal. Post them into ledger and prepare a Trial Balance. Jan 1; Jan 2; Jan 10 Jan 15 Jan 20 Jan 28 Jan 31 Started business with cash Rs. 80,000 Bought...
-
Let be an arbitrary operation in Problems 5259. Describe the operation for each problem. 5038; 70 2= 9; 901 = 10; 8 0 2 = 10; -
-
Block A in Fig. 8.35 has mass 1.00 kg, and block B has mass 3.00 kg. The blocks are forced together, compressing a spring S between them; then the system is released from rest on a level,...
-
You are the manager of a firm that produces a product according to the cost function C(qi) = 100 + 50qi 4qi2 + qi3. Determine the short-run supply function if: a. You operate a perfectly competitive...
-
Styles Salon had \($87,000\) of total assets and \($52,000\) of total stockholders equity at December 31, 2010. At December 31,2011, Styles Salon had assets totaling \($153,000\) and stockholders...
-
A process has been modeled and Laplace transformed to obtain the following two equations: where the outputs are Y1 and Y2, and the inputs are U1 and U2.(a) Find the transfer functions (b) What is the...
-
The Money Tree Investment Fund is considering adding a new $30 million investment, White Inc. shares, to the list in Part 1. White Inc. has just paid a dividend, D0, of $1.50 per share, with an...
-
At Vision Club Company, office workers are employed for a 40-hour workweek on either an annual or a monthly salary basis. Given on the form below are the current annual and monthly salary rates for...
-
On November 1, 2022, the following were the account balances of Blossom Equipment Repair Limited. Blossom's year-end is October 31 and it records adjusting entries monthly. Cash Accounts receivable...
-
Describe how partial and circular reasoning can be helpful or harmful in resolving ethical dilemmas.
-
Explain end-of-life issues as they relate to autopsy, organ donations, research experimentation, and clinical trials.
-
Discuss what AIDS is and how it is contracted.
-
Describe the various legal risks for nurses.
-
Describe how patient autonomy has been impacted by case law and legislative enactments.
-
Given a five-year, 8% coupon bond with a face value of $1,000 and coupon payments made annually, Calculate the following: What is the bond value if it is trading at the yield of 6%? What is the bond...
-
Prairie Outfitters, Inc., a retailer, accepts paymnent through credit cards. During August, credit card sales amounted to $12,000. The processor charges a 3% fee. Assuming that the credit card...
-
Kolbec Community College (KCC) has 4,000 full-time students and offers a variety of academic programs in three areas: professional studies, arts, and technology. The professional studies programs...
-
Understanding cost terms and concepts is considerably more important in larger organizations with complex operations and multiple products or services being offered. In smaller and simpler companies...
-
Road Gear manufactures accessories for road and mountain bicycles. The market for cycling accessories is very competitive, so Road Gear uses a standard costing system to control costs. The day-to-day...
-
A hospitals records show that the cost of carrying out health checks in the last five accounting periods has been as follows: Using the highlow method and ignoring inflation, the estimated cost of...
-
Intermediate: Cost estimation using the linear regression formula. The management accountant at Josephine Ltd is trying to predict the quarterly total maintenance cost for a group of similar...
-
The budget for the production cost of a new product was based on the following assumptions: (i) Time for the 1 st batch of output = 10 hours (ii) Learning rate = 80 per cent (iii) Learning will cease...
Study smarter with the SolutionInn App