Business, 30.04.2021 21:20 emmasparkle54

Edgerron Company is able to produce two products, G and B, with the same machine in its factory. The following information is available. Product G Product B
Selling price per unit $200 $230
Variable costs per unit 85 138
Contribution margin per unit $115 $92
Machine hours to produce 1 unit 0.4 hours 1.0 hours
Maximum unit sales per month 650 units 250 units

The company presently operates the machine for a single eight-hour shift for 22 working days each month. Management is thinking about operating the machine for two shifts, which will increase its productivity by another eight hours per day for 22 days per month. This change would require $11,500 additional fixed costs per month.

Required:
Determine the contribution margin per machine hour that each product generates.

Answers: 2

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Edgerron Company is able to produce two products, G and B, with the same machine in its factory. The...

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