ect Exercises a eztomheducationcomhmtpx xercisez3gSales mX

ect Exercises a × ezto.mheducation.com/hm.tpx xercisez3gSales mX determination anaanaySIS LUAT olt Company owns a machine that can produce two specialized products. Production time for Product TLX s two units per hour and for Product MTV is five units per hour. The machine\'s capacity is 2,750 hours per ear. Both products are sold to a single customer who has agreed to buy all of the company\'s output up to a maximum of 4,700 units of Product TLX and 2,500 units of Product MTV. Selling prices and variable costs er unit to produce the products follow 4.80$9.50 5.50 $ 15.00 Selling price per unit Variable costs per unit Determine the company\'s most profitable sales mibx and the contribution margin that results from that sales mix. (Round per unit cost answers to 2 decimal places.) Product TLX Product MTV Contribution margin per unit Contribution margin per production hour Product TLX Product MTV Total Maximum number of units to be sold 4,700 2.500 Hours required to produce maximum units or Most Profitable Sales Mix Product TLX Product MTV Total Hours dedicated to the production of each product Units produced for most profitable sales mbc Contribution margin per unit Total contribution margin Hints References eBook & Resources

Solution

Workings:1

Given,

TLX: 2 units= one hour; MTV: 5 units = one hour

1 unit = 0.5 hour 1 unit = 0.2 hour

a)

b)

c)

Workings 2:  

TLX: Contribution per hour =$ 10.2/0.5 hours

= $ 20.4 per hour------------RANKING -1

MTV: Contribution per hour =$ 4/0.2 hours

= $ 20 per hour--------------Ranking -2

From the above we infer that with the available 2750 hours, first priority to sell is to be given for Product TLX and then next to Product MTV

  

	Product TLX	Product MTC
Selling Price per unit	$ 15	$ 9.5
Variable cost per unit	($ 4.8)	($ 5.5)
Contribution margin per unit	$ 10.2	$ 4
Contribution margin per production hour	$ 10.2/0.5=$20.4	$4/0.2=$20