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Ray Of Light [21]
4 years ago
11

A company can sell all the units it can produce of either Product A or Product B but not both. Product A has a unit contribution

margin of $8 and takes two machine hours to make and Product B has a unit contribution margin of $21.0 and takes three machine hours to make. If there are 5000 machine hours available to manufacture a product, income will be:______
Business
2 answers:
sleet_krkn [62]4 years ago
7 0

Answer:

Total income = $35,000

Explanation:

Limiting factor analysis

the company is faced with a limiting factor situation.

<em>Here the  business is faced with a problem of shortage of a resource i.e machine hours which can be used to produced more than one product type. </em>

<em> To maximize the use of the resource , the business should allocate the limited resource for production purpose in </em>such a way that it maximizes the contribution per unit of the scare resource.

Therefore, the Company should allocate the machine hours to maximise the contribution per unit of oven hour. This is done as follows:

Step 1

Calculate he contribution per machine hour and rank the product

cont/hr ranking

Product A $8/2 hours = $4 per hour  (2nd ranking)

Product B   $21/3 hours = $7 per hour  (1st  ranking)

Product B generates a higher contribution per machine hour , therefore  the company should allocate all the machine  hours to product B

Step 2

Calculate the Total contribution from the production of product B

Total contribution margin = $7 per hour s × 5,000 hours

= $35,000

shutvik [7]4 years ago
5 0

Answer:

$35,000

Explanation:

Income from product A = ($8 ÷ 2) × 5,000 = $4 × 5,000 = $20,000

Income from product B = ($21 ÷ 3) × 5,000 = $7 × 5,000 = $35,000

Since $35,000 income from product B is $15,000 higher than $20,000 from product A, product B will be produced and income will be $35,000.

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geniusboy [140]

Answer:

You got this, never give up!

Explanation:

Believe in yourself. : )

7 0
3 years ago
Private enterprise is most unlikely associated with
Nutka1998 [239]
A because capitalism is FREE enterprise and public companies don’t relate to either of them
6 0
3 years ago
Bill was 150 pounds overweight but his insurance premiums significantly dropped after he lost weight by going to a local health
Serggg [28]

The kind of measures that Bill took which made his insurance premiums to drop is a preventative measure.

<h3>What is a preventative measure?</h3>

In insurance, a preventative measure can be defined as a kind of measure that typically involves reducing the degree of risk associated with an insurance object, and mitigating (decreasing) the negative impact of potential insurance-related accidents on the insured.

In this context, we can infer and logically deduce that the kind of measures that Bill took which made his insurance premiums to drop is a preventative measure.

Read more on insurance here: brainly.com/question/16789837

#SPJ1

7 0
2 years ago
Select the true statement about default risk. It is the risk that the bond's price will fall below its par value. Bondholders ha
Novosadov [1.4K]

Answer:

Bondholders have a degree of legal protection against default risk, but it is not comprehensive.

Explanation:

A bond can be defined as a debt or fixed investment security, in which a bondholder (investor or creditor) loans an amount of money to the bond issuer (government or corporations) for a specific period of time. The bond issuer are expected to return the principal (face value) at maturity with an agreed upon interest (coupon), which are paid at fixed intervals.

The par value of a bond is its face value and it comprises of its total dollar amount as well as its maturity value. Also, the par value of a bond gives the basis on which periodic interest is paid. Thus, a bond is issued at par value when the market rate of interest is the same as the contract rate of interest. This simply means that, a bond would be issued at par (face) value when the bond's stated rated is significantly equal to the effective or market interest rate on the specific date it was issued.

In Economics, bonds could either be issued at discount or premium. A bond that is being issued at a discount has its stated rate lower than the market interest rate, on the specific date of issuance while a bond that is issued at a premium, has its stated rate higher than the market interest rate on the specific date of issuance.

Default risk in bonds refer to the risk that a bond issuer (borrower) is unable to pay the principal or interest agreed upon in the contract with the bondholder (lender) in a timely manner.

Hence, the true statement about default risk is that bondholders have a degree of legal protection against default risk, but it is not comprehensive.

5 0
3 years ago
Sam's Pizza is considering a new store location. For accounting purposes, fixed operating costs for a store are $245,000 a year,
Yuki888 [10]

Answer:

33,793   pizzas

Explanation:

The annual break-even sales level for the number of pizzas sold in the location is computed using the break-even sales units formula  below:

break-even sales=fixed costs/contribution margin per pizza

fixed costs=$245,000

contribution margin per pizza=selling price-variable cost

selling price=$12.50

variable cost=selling price*42%

variable cost=$12.50*42%

variable cost=$5.25

contribution margin per pizza=$12.50-$5.25 =$7.25

break-even sales=$245,000/$7.25 = 33,793   pizzas

5 0
3 years ago
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