Home of Households, Inc., has an appliance manufacturing plant in the Chicago area. The company specializes in producing smaller
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My answer is: Produce Product C first, then followed by Product A. to maximize contribution margin. Product B will not be produced since the maximum number of pounds has already been used in producing Products C and A.
<span> <span> </span><span><span> PER UNIT
</span> <span> PRODUCT A B C
</span> <span> SELLING PRICE 80 62 81
</span> <span> VARIABLE EXPENSES
</span> <span> DIRECT MATERIALS 24 18 9
</span> <span> OTHER VAR EXP. 24 25.4 43.65
</span> <span> TOTAL VAR EXP 48 43.4 52.65
</span> <span> CONTRIBUTION MARGIN 32 18.6 28.35
</span> <span> <span>CM RATIO </span> 0.4 0.3 0.35
</span> <span> </span> <span>
COMPANY CAN SELL 800 UNITS OF EACH PRODUCT PER MONTH.
</span> <span> SAME RAW MATERIAL IS USED IN EACH PRODUCT.
</span> <span> MATERIAL COSTS 3 PER POUND W/ A MAX OF 5,000 POUNDS EACH MONTH
</span> <span> </span> <span>
PRODUCT DM <span>UNIT COST </span> NO. OF LBS
</span> <span> A 24 3 8
</span> <span> B 18 3 6
</span> <span> C 9 3 3
</span> <span> </span> <span> PRODUCT NO. OF LBS/UNIT MAX UNITS TOTAL NO. OF LBS
</span> <span> A 8 800 6400
</span> <span> B 6 800 4800
</span> <span> C 3 800 2400
</span> <span> TOTAL 13600
</span> <span> LIMITATION: 5,000 POUNDS PER MONTH ONLY.
</span></span></span><span> <span> </span><span><span> <span>required: </span>
</span> <span> <span>1. calculate the contribution margin per pound of the constraining resource for each product. </span>
</span> <span> 2. which orders would you advise the company to accept first, those for a, b, or c? which orders second? third?
</span> <span> </span> <span>
</span></span></span><span>PLS. SEE ATTACHMENTS FOR MY FULL COMPUTATIONS. </span>
<span> <span> </span><span><span> PER UNIT
</span> <span> PRODUCT A B C
</span> <span> SELLING PRICE 80 62 81
</span> <span> VARIABLE EXPENSES
</span> <span> DIRECT MATERIALS 24 18 9
</span> <span> OTHER VAR EXP. 24 25.4 43.65
</span> <span> TOTAL VAR EXP 48 43.4 52.65
</span> <span> CONTRIBUTION MARGIN 32 18.6 28.35
</span> <span> <span>CM RATIO </span> 0.4 0.3 0.35
</span> <span> </span> <span>
COMPANY CAN SELL 800 UNITS OF EACH PRODUCT PER MONTH.
</span> <span> SAME RAW MATERIAL IS USED IN EACH PRODUCT.
</span> <span> MATERIAL COSTS 3 PER POUND W/ A MAX OF 5,000 POUNDS EACH MONTH
</span> <span> </span> <span>
PRODUCT DM <span>UNIT COST </span> NO. OF LBS
</span> <span> A 24 3 8
</span> <span> B 18 3 6
</span> <span> C 9 3 3
</span> <span> </span> <span> PRODUCT NO. OF LBS/UNIT MAX UNITS TOTAL NO. OF LBS
</span> <span> A 8 800 6400
</span> <span> B 6 800 4800
</span> <span> C 3 800 2400
</span> <span> TOTAL 13600
</span> <span> LIMITATION: 5,000 POUNDS PER MONTH ONLY.
</span></span></span><span> <span> </span><span><span> <span>required: </span>
</span> <span> <span>1. calculate the contribution margin per pound of the constraining resource for each product. </span>
</span> <span> 2. which orders would you advise the company to accept first, those for a, b, or c? which orders second? third?
</span> <span> </span> <span>
</span></span></span><span>PLS. SEE ATTACHMENTS FOR MY FULL COMPUTATIONS. </span>
Answer:
3.3%
Explanation:
The yearly rate of return is calculated by taking the amount of money gained or lost at the end of the year and dividing it by the initial investment at the beginning of the year.
DATA
Future value = $25,000
Present value = $18,000
Time = 10 years
Formula:
Annual return =
Annual return =
Annal return = 3.3%