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Fed [463]
3 years ago
9

Consider the following production and cost data for two products, Q and P: Product Q Product P Contribution margin per unit $35

$40 Machine minutes needed per unit 7 minutes 5 minutes A total of 14,700 machine minutes are available each period, and there is unlimited demand for each product. What is the largest possible total contribution margin that can be realized each period
Business
1 answer:
hammer [34]3 years ago
4 0

Answer:

Total contribution =$117,600

Explanation:

<em>Whenever a company is faced with a limiting factor i.e a resource in short supply, the company should allocate the resource to the product with he highest contribution per unit of the scare resource . </em>

<em>The business outfit should rank its products using contribution per minute of constraint </em>

This is done as follows:

Product                                               Q                 P

Contribution margin                         35                40

Machine hours /unit                          7                  5

Contribution /minutes                         5                 8

Ranking for production                      2nd           1st

Note contribution per minute = contribution per unit/minutes required

<em>Allocation of machine hours</em>

All the 14,700 machine hours should be allocated to the production of product P. Doing so would produce a total maximum contribution equals to

Total contribution : machine hours ×  contribution per machine hr

Total contribution = 8× 14,700 =  117,600  

Total contribution =$117,600  

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Answer:

$9,500

Explanation:

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7 0
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egoroff_w [7]

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<h3>What is Everyday Low Pricing?</h3>

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6 0
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xeze [42]

Answer:

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Arthur owns a tract of undeveloped land (adjusted basis of $145,000) which he sells to his son, Ned, for its fair market value o
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Answer:

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