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Ray Of Light [21]
3 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]3 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]3 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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Answer:

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Explanation:

the correct answer is option D

in a chain process which directly creates and delivers goods and services to the customer is known as a Core process.

Support process does not create any product or services it only assists in the execution of the process.

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7 0
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Answer the following questions​ (a) at zero output level if total cost is​ $100 what will be values of total variable cost and t
mr_godi [17]

Answer:

(a) Total fixed cost is equal to $100, while total variable cost is equal to $100.

(b) Total cost = $165; Average total cost = $41.25; Average fixed cost = $25; and Average variable cost = $16.25

Explanation:

A fixed cost is a cost that does not change as the output changes. It is usually incurred before production starts and it continues to be incurred when there is a production stoppage. It includes cost on plant and machinery, building, etc.

A variable is a cost that changes as output changes. It is not incurred when there is a production stoppage. It includes cost of material and labour.

Based on this we can answer the question as follows:

(a) at zero output level if total cost is $100 what will be values of total variable cost and total fixed costs

At zero output level, fixed cost is equal to total cost. Therefore, total fixed cost is equal to $100.

At zero output level, no variable cost will be cost. Therefore, total variable cost is equal to $100.

(b) At 4 units of output values of total fixed cost and total variable cost are $100 and $65 respectively. What are values for total cost, average total cost, average fixed cost and average variable cost?

Total cost = Total fixed cost + Total variable cost = $100 + $65 = $165

Average total cost = Total cost/Units of output = $165/4 = $41.25

Average fixed cost = Total fixed cost/Units of output = $100/4 = $25

Average variable cost = Total variable cost/Units of output = $65/4 = $16.25 .

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