Question

Thermic co produce 2 product lines: Warm o Martic and Thermorobot. The manager are deciding which product line to emphasize and to make decision they assembly the following data: Warm o Matic: Sales price per unit: $65; Variable expenses per unit $35; contribution margin per unit $30; monthly market demand 19000. Thermorobot: sales price per unit $160; Variable expenses per unit $100; contribution margin per unit $60; monthly market demand 6500. The factory has a production capacity of 1500 hours per months. The plant can manufacture 20 Warm o Matics or 8 Thermorobot per machine hour. What is the product mix that maximizes Thermic Co s month,y operating profit?

Answer #1

Warm o Martic | Thermorobot | |||

Contribution margin per unit | 30 | 60 | ||

Machine hour per unit | 0.05 | 0.125 | ||

Contribution margin per machine hour | 600 | 480 | ||

Therefore it is profitable to produce Warm o Martic first | ||||

Machine hours required to satisfy Warm o Martic monthly demand =(19000*0.05)= 950 | ||||

Machine hours for Thermobot monthly demand=(1500-950)=550 | ||||

Production for Thermobot = 550/0.125= | 4400 | |||

Product mix: | ||||

Warm o Martic | 19000 | |||

Thermorobot | 4400 | |||

Colt Company owns a machine that can produce two specialized
products. Production time for Product TLX is three units per hour
and for Product MTV is four units per hour. The machine’s capacity
is 2,400 hours per year. Both products are sold to a single
customer who has agreed to buy all of the company’s output up to a
maximum of 4,080 units of Product TLX and 4,580 units of Product
MTV. Selling prices and variable costs per unit to...

5.
Colt Company owns a machine that can produce two specialized
products. Production time for Product TLX is two units per hour and
for Product MTV is five units per hour. The machine’s capacity is
2,100 hours per year. Both products are sold to a single customer
who has agreed to buy all of the company’s output up to a maximum
of 3,570 units of Product TLX and 1,955 units of Product MTV.
Selling prices and variable costs per unit...

Colt Company owns a machine that can produce two specialized
products. Production time for Product TLX is three units per hour
and for Product MTV is four units per hour. The machine’s capacity
is 2,400 hours per year. Both products are sold to a single
customer who has agreed to buy all of the company’s output up to a
maximum of 4,080 units of Product TLX and 4,580 units of Product
MTV. Selling prices and variable costs per unit to...

33.
Madison Corporation sells three products (M, N, and O) in the
following mix: 3:1:2. Unit price and cost data are:
M
N
O
Unit sales price
$
7
$
4
$
10
Unit variable costs
3
2
4
Total fixed costs are $360,000. The selling price per composite
unit for the current sales mix (rounded to the nearest cent)
is:
35.Flannigan Company manufactures and sells a single product
that sells for $450 per unit; variable costs are $252. Annual...

1. 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 $18.0 and takes three
machine hours to make. If there are 5000 machine hours available to
manufacture a product, income will be
$10000 more if Product A is made.
$10000 less if Product B...

Segmented Income Statements, Adding and Dropping Product
Lines
Dantrell Palmer has just been appointed manager of Kirchner
Glass Products Division. He has two years to make the division
profitable. If the division is still showing a loss after two
years, it will be eliminated, and Dantrell will be reassigned as an
assistant divisional manager in another division. The divisional
income statement for the most recent year is as follows:
Sales
$4,590,000
Less: Variable expenses
3,953,450
Contribution margin
$636,550
Less: Direct...

O'?Neill's Products manufactures a single product.? Cost, sales,
and production information for the company and its single product
is as? follows:
-Selling price per unit is $53
-Variable manufacturing costs per unit manufactured (includes
direct materials [DM], direct labor [DL], and variable MOH $27
-Variable operating expenses per unit sold $1
-Fixed manufacturing overhead (MOH) in total for the year
$64,000
-Fixed operating expenses in total for the year $91000
-Units manufactured and sold for the year 8,000 units
Requirement...

StoreAll produces plastic storage bins for household storage
needs.
Regular
Large
Sales price per unit
$9.00
$10.50
Variable costs per unit
3.20
4.50
The company makes two sizes of? bins: large? (50 gallon) and
regular? (35 gallon). Demand for the products is so high that
StoreAll can sell as many of each size as it can produce. The
company uses the same machinery to produce both sizes. The
machinery can only be run for 3,000 hours per period. StoreAll can...

A company produces and sells three products.
Product 1
Product 2
Product 3
Selling price per unit
$100
$200
$150
Contribution Margin per Unit
$20
$80
$60
Direct labor hours per unit
2
6
4
What is the maximum total monthly contribution margin that the
company can earn if it has only 1000 direct labor hours per month
and monthly demand for each product is
unlimited? (Round to the nearest
dollar.)

Nice Corporation produces and sells a single product. Data
concerning that product appear below:
Per Unit
Percent of Sales
Selling price
$
260
100
%
Variable expenses
65
25
%
Contribution margin
$
195
75
%
Fixed expenses are $180,000 per month. The company is currently
selling 1,300 units per month.
Required:
Management is considering using a new component that would
increase the unit variable cost by $54. Since the new component
would improve the company's product, the marketing manager...

ADVERTISEMENT

Get Answers For Free

Most questions answered within 1 hours.

ADVERTISEMENT

asked 1 minute ago

asked 1 minute ago

asked 1 minute ago

asked 5 minutes ago

asked 19 minutes ago

asked 27 minutes ago

asked 45 minutes ago

asked 58 minutes ago

asked 59 minutes ago

asked 1 hour ago

asked 1 hour ago

asked 1 hour ago