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andriy [413]
3 years ago
14

Omega Company reported the following information for the company's two products: Product X Product Y Selling price per unit $ 35

$ 25 Variable cost per unit 20 15 Assume that 75,000 machine hours are available; product X takes 4 machine hours to produce, and product Y takes 2 machine hours to produce. The company can sell all it can make of either product. Which of the following statements is true?A) Product Y should be produced because more of it can be produced.B) Product Y should be produced because it will produce greater total profit.C) Product X should be produced because it provides a greater contribution margin.D) Both products provide the same total profit.
Business
2 answers:
Elena L [17]3 years ago
5 0

Answer:

Omega Company

B) Product Y should be produced because it will produce greater total profit.

Explanation:

If only Product X is produced, the total profit it will produced is:

Selling price = $35

Variable Cost = $20

Contribution = $15

Total Contribution = $15 x 75,000/4 = $281,250

If only Product Y is produced, the total profit will be:

Selling price = $25

Variable cost = $15

Contribution = $10

Total Contribution = $10 x 75,000/2 = $375,000

Product Y therefore produces a greater total profit.  This is because the fixed cost will remain the same if there are no avoidable elements.

dexar [7]3 years ago
4 0

Answer:

B) Product Y should be produced because it will produce greater total profits

Explanation:

The contribution margin per unit determines the contribution per unit for a given product. The contribution margin in limited resources is calculated by dividing contribution margin by per unit scarce resource. The product X contribution margin is $15 ($35 - $20) and product Y contribution margin is $10. Keeping the scarce resource if machine hours in view the contribution margin is

Product X = $15 / 4 machine hours = $3.75 per machine hour

Product Y = $10 / 2 machine hours = $5 per machine hour

The Omega Company should produce more of product Y because it uses less machine hours and is more profitable.

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Mashcka [7]
The perception that Ben would imply on his products is that the cost of ownership could be possible for pricing. In addition, this kind of pricing would significantly aid the buyer on knowing what are the direct and indirect costs of a specific product or service wherein it is usually accronymed as TCO (Total cost of ownership)
8 0
3 years ago
(20 points)
neonofarm [45]

c.

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7 0
3 years ago
Read 2 more answers
1. Albacore Corporation purchased a new machine costing $27,600 on January 1, 2017. The machine is expected to have a $1,800 sal
docker41 [41]

Answer:

Annual depreciation= $4,300

Explanation:

Giving the following information:

Purchasing price= $27,600

Salvage value= $1,800

Useful life= 6 years

To calculate the depreciation expense using the straight-line method, we need the following formula:

Annual depreciation= (original cost - salvage value)/estimated life (years)

Annual depreciation= (27,600 - 1,800) / 6= $4,300

7 0
3 years ago
The process of formalizing acceptance of the completed project deliverables is also known as _______________
vlada-n [284]
The process of formalizing acceptance of the completed project deliverables is also known as Validate Scope.
Hope this helps!
7 0
3 years ago
External equity refers to ________. A. how a job’s pay rate in one company compares to the job’s pay rate in other companies B.
Lerok [7]

Answer: how a job’s pay rate in one company compares to the job’s pay rate in other companies

Explanation: External equity refers to the situation when a company's pay rate differs from the market's pay rate to the employees of the organisation. It is also termed as matching strategy.

It is considered as a major factor in employing and retaining sufficient employees in the organisation. Therefore, lesser the external equity the better it is.

From the above explanation we can conclude that the correct option is A.

4 0
3 years ago
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