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Alchen [17]
3 years ago
10

Uva Systems Inc. has a limited amount of direct material available for products 1A1 and 2B2. Each unit of 1A1 has a contribution

margin of $12 and each unit of 2B2 has a contribution margin of $30. A unit of 2B2 uses three times as much direct material as a unit of 1A1. What is Uva's most profitable sales mix, assuming there is unlimited demand for either product
Business
1 answer:
a_sh-v [17]3 years ago
7 0

Answer:

Make All 1A1

Explanation:

Calculation to determine What is Uva's most profitable sales mix, assuming there is unlimited demand for either product

First step is to calculate the Contribution margin of 1 unit of 2B2

Contribution margin of 1 unit of 2B2 = 1 x $30

Contribution margin of 1 unit of 2B2 = $30

Second step is to calculate the Contribution margin of 3 units of 1A1

Contribution margin of 3 units of 1A1 = 3 x $12

Contribution margin of 3 units of 1A1 = $36

Based on the above calculation for both Contribution margin of 1 unit of 2B2 and Contribution margin of 3 units of 1A1 we can see that Contribution margin of 3 units of 1A1 is the most profitable sales mix.

Therefore Uva's most profitable sales mix, assuming there is unlimited demand for either product is Make All 1A1

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Answer:

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4 years ago
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4 0
1 year ago
Suppose that a company needs 1,500,000 items during a year and that preparation for each production run costs $900. Suppose also
elena-s [515]

Answer:

30,000 units

Explanation:

According to the inventory cost model, the production run size that minimizes costs is given by:

P = \sqrt{\frac{2*D*S}{H}}

Where D is the annual demand (1,500,000 items), S is the cost of each production run ($900) and H is the holding cost per unit ($3). Applying the given data:

P = \sqrt{\frac{2*1,500,000*900}{3}}\\P=30,000\ units

Each production run should consist of 30,000 units.

7 0
3 years ago
If C(x) is the cost of producing x units of a commodity, then the average cost per unit is c(x) = C(x)/x. Consider the cost func
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Explanation:

Given that,

Total cost of production at x = 1000 units

C(x) = 2000 + 170x + 4x^{\frac{3}{2} }

C(1000) = 2000 + 170(1000) + 41000^{\frac{3}{2} }

             = 2000 + 170000 + 126491.106

             = $2,98,491.106 ⇒ Total cost of production

So, above is the cost of producing 1000 units.

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