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stealth61 [152]
3 years ago
8

Hamrick Industries makes and sells two products. The demand for both products is unlimited. Product A has a contribution margin

of $7.70 per unit. Product B has a contribution margin of $2.64 per unit. The same machines are used to produce both products. Product A requires 0.33 machine hours and product B requires 0.20 machine hours. Which product should the company make and sell? Product A because the selling price is $11.00 per unit Product A because the contribution margin per unit is $7.70 Product A because the contribution margin per MH is $23.33 Product B because the contribution margin per MH is $13.20 Product B because the contribution margin per unit is $2.64
Business
2 answers:
sergejj [24]3 years ago
8 0

Answer:

Product A because the contribution margin per MH is $23.33

Explanation:

In terms of efficiency, you have to look for the highest outcome with the fewer use of resources. In this case, the resources available are the machines, and the outcome is the profit (margin per unit). Applying the formula:  Efficiency producing X (Ex) = [(1 hour of machine hour) / (Product x timed used per unit)]Margin per unit X, and comparing products A and B, you get that producing A is more efficient in terms of profits than producing B, by $10,1 per hour (23,33 - 13,2)

tatiyna3 years ago
8 0

Answer: Product A because contribution margin per unit is $7.70

Explanation:

Contribution margin is the difference between the sales price and the variable cost of a product, any product that has a positive contribution is worth investing in for the contribution will on the long run take off the fixed cost and company will subsequently makes a profit. However in a competitive situation the firm should chose a product with the higher contribution margin.

The price is not a strong determinant nor the contribution in relation to a single variable when the contribution per unit is giving.

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Answer:

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Explanation:

given data

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solution

we know that

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X                     60 %                         14 %                       8.4 %

Y                     40 %                          10 %                       4%

total                                                                                 12.4 %

so here

return from risky portfolio is = 12.4 %

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return from risk free investment = 5 %

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solve we get

x = 0.405

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and

amount to be investment in risky portfolio = $1000 × 0.405

amount to be investment in risky portfolio =  $405

and

amount invest in security x = $405 × 60%

amount invest in security x = $243

and

amount invested in security Y = $405 × 60%

amount invested in security Y = $162

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