Blossom Corporation produces three products, Standard, Deluxe and Superior, with the following characteristics:Selling price per unitVariable cost per unitContribution marginper unitMachine hours per unitStandard Deluxe Superior$2014$62$2217$52$21O Standard first, Deluxe second, Superior thirdO Deluxe first. Standard second, Superior thirdO Superior first, Standard second, Deluxe thirdO Standard first, Superior second, Deluxe third19$22The company has only 1810 machine hours available each period. If demand exceeds the company's capacity, in what sequence shouldorders for the three products be filled to maximize the company's total contribution margin? Sandhillindustries manufactures light fixtures for home, retail, and industrial customers. The Petall line has beenseveral years, and management is considering dropping the line. Recent income statements have been very similar to the followinginformation which was prepared for the most recent year.SalesVariable costsContributionmarginFixed costsOperating incomeHomeO $77300O $99600O $23600O $(6400)$551000358800192200126000$66200Retail$321000218700102300131000$(28700)Industrial$831000681600149400116000$33400Total$17030001259100443900373000$70900►Of the fixed costs, $318000 of it is common costs that have been allocated equally to each product line. What will total operatingincome be if Sandhill drops the retail line?

Contribution per unit is arrived at by deducting cost per unit from sales price per unit. It is one…

Blossom Corporation produces three products, Standard, Deluxe and Superior, with the following characteristics: Selling price per unit Variable cost per unit Contribution margin per unit Machine hours per unit Standard Deluxe Superior $20 14 $6 2 $22 17 $5 2 $21 O Standard first, Deluxe second, Superior third O Deluxe first. Standard second, Superior third O Superior first, Standard second, Deluxe third O Standard first, Superior second, Deluxe third 19 $2 2 ► The company has only 1810 machine hours available each period. If demand exceeds the company's capacity, in what sequence should orders for the three products be filled to maximize the company's total contribution margin?

Blossom Corporation produces three products, Standard, Deluxe and Superior, with the following characteristics: Selling price per unit Variable cost per unit Contribution margin per unit Machine hours per unit Standard Deluxe Superior $20 14 $6 2 $22 17 $5 2 $21 O Standard first, Deluxe second, Superior third O Deluxe first. Standard second, Superior third O Superior first, Standard second, Deluxe third O Standard first, Superior second, Deluxe third 19 $2 2 ► The company has only 1810 machine hours available each period. If demand exceeds the company's capacity, in what sequence should orders for the three products be filled to maximize the company's total contribution margin?

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter7: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 46E: Lotts Company produces and sells one product. The selling price is 10, and the unit variable cost is...

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Sandhill Corporation produces three products, Standard, Deluxe and Superior, with the following characteristics: Selling price per unit Variable cost per unit Contribution margin per unit Machine hours per unit Standard Deluxe Superior $18 9 $9 2 $20 12 $8 2 $19 O Superior first, Standard second, Deluxe third O Standard first, Superior second, Deluxe third O Deluxe first, Standard second, Superior third O Standard first, Deluxe second, Superior third 18 $1 2 The company has only 1790 machine hours available each period. If demand exceeds the company's capacity, in what sequence should orders for the three products be filled to maximize the company's total contribution margin?
Cube Industries sells three products-P, Q and R. Here are data regarding these three products: Product Q Annual customer demand, in units Selling price, per unil Variable costs, per unit Direct labor hours to produce one unit O $17 per hour O $18 per hour O $19 per hour O $21 per hour Product P O None of the above 525 units $660 $280 20 hours 450 units $940 $515 25 hours Product R 600 units Cube's current capacity is 18,300 direct labor hours per year. How much should Cube be willing to pay per direct labor hour to acquire additional capacity? $370 $160 10 hours
Waterberry Company operates a single - product entity. Data relating to the produ follows.Time left 1:07:22it ofAnnual volume 64 000 units Selling price per unit $50Variable manufacturing cost per unit14Annual fixed manufacturing costs 640 000Variable marketing and distribution costs per unit6Annual fixed non - manufacturing costs 320 000What is the total variable cost per unit of the above product?a.bC.d.$6$14520$13
Hitec industries produces three products with the following costs and selling prices: Product Y Selling price per unit P40 P30 P35 Variable costs per unit 24 18 20 Contribution margin per unit 18 14 15 Direct labor hours per unit 3 Machine hours per unit 7 4 If Hitec has a limit of 30,000 machine hours but no limit on units sold or direct labor hours, then the three products should be produced in which order? Y. Z, X X, Y, Z X, Z, Y Z, X, Y 2.
Knotley Co. sells two products, X and Y. Last year Knotley sold 14,000 units of X’s and 21,000 units of Y’s. Related data are: Unit Selling Price Unit Variable Unit contribution Product Price Cost Margin X $110 $70 $40 Y 70 50 $20 What was Knotley Co.’s overall unit variable cost? A. $58 B. $48 C. $70 D. $50
XYZ Company has two divisions, X and Y. X makes product X1 and Y makes product Y+. Every unit of product Y+ requires one unit of product X1 as a component. Y purchases most of its X1 requirement from X although sometimes it makes purchases from outside suppliers. Relevant details of products X1 and Y+ are tabulated as follows: Product X1 Product Y+ Established selling price $30 $50 Variable Cost Per Unit - Mat 8 5 Transfer price 30 Labor 5 3 Overhead 2 2 Total Variable Cost 15 40 Fixed Costs 500,000 225,000 Annual Outside Demand 100,000 25,000 Plant Capacity 130,000 30,000 Investment in Divisions: (X) $ 6,625,000 (Y) $ 1,250,000 Division Y is currently achieving an ROI below target. It’s manager blames this on the high transfer price of product X1. The manager of Division X claims that the current transfer price ($30) is appropriate since ‘it is determined by the market’. The manager of division…
Wildflower Inc. sells three products-J, K and L. Here are data regarding the three products: Annual customer demand, in units Selling price, per unit Variable costs, per unit Direct labor hours to produce one unit $85 per hour O $90 per hour O $95 per hour O $105 per hour Product J 525 units $660 $280 4 hours None of the above Product K 450 units $940 $515 5 hours Product L 600 units Wildflower's current capacity is 3,000 direct labor hours per year. How much should Wildflower be willing to pay per direct labor hour to acquire additional capacity? $370 $160 2 hours
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Krispies Ltd manufactures and sells three products which have the following revenue and costs per unit: Snap Crackle PopSelling price per unit snap: R15 crackle: R20 pop: R12Variable cost per unit snap: R10 crackle:1R3 pop: R6Fixed cost per unit snap: R2 crackle: R3 pop: R2 Unit fixed costs are based on the following sales volumes:Snap – 15 000 unitsCrackle – 12 000 unitsPop – 30 000 units Required:Calculate the aggregate break‐even units and sales for Krispies Ltd.Round to two decimals.
CABBAGE Company makes three products with the following characteristics: Product Product Product V JK JIN Selling price per unit P10 P15 P20 Variable Cost per unit P6 P10 P10 Machine hours per unit 2 4 10 The company has a capacity of 2,000 machine hours, but there is virtually limited demand for product V of 350 units and product JIN of 560 units. In order to maximize total contribution margin, how many units of each product should the company product for product JK?
W Incorporation produces three products, Product P, Product Q and Product R. Product P requires 6 Labor hours per unit to be completed, Product B requires 8 labor hours per unit to be completed and Product C requires 4 labor hours per unit to be completed. The company's labor hours are limited to 60,000 hours. The information related to the three products are given below: Particulars Product P Product Q Product R Selling price per unit Variable cost per unit Demand (units) $600 $800 $200 $350 $600 $150 5500 4800 2000 Calculate the maximum number of units that can be produced for Product P provided the company applies the policy of producing as per optimal utilization of the constrained resource. a. 4200 units b. 5500 units c. 3600 units d. 2140 units
XYZ Ltd manufactures three products, X, Y and Z, for which the following information is available: X Y Z Sales demand 550 units 500 units 400 units Selling price (per unit) $16 $18 $14 Variable cost: material Labour 8 6 2 4 6 9 XYZ Ltd has existing inventory of 250 units of X and 200 units of Z, which it is willing to use us to meet the sales demand. All three products use the same direct materials and the same type of direct labour. In the next year, the available supply of material will be restricted to $4,800 (at cost) and the available supply of labour will be $6,600 (at cost). Required: Determine what product mix and sales mix would maximize XYZ Ltd’s profits in the next year, and prepare a profit statement based on the profit maximizing mix identified.