This Website Has Been Moved to a New Link


Loading

E6-11 Thorne Company manufactures and sells three products. Relevant per unit data

Price: $1.99


Spencer Company manufactures and sells three products. Relevant per unit data
concerning each product are given below.

A B C
Selling price   8  12  15
Variable costs and expenses   3  10  12
Machine hours to produce   2  1  2

Instructions
(a) Compute the contribution margin per unit of the limited resource (machine hours) for
each product.
(b) Assuming 1,500 additional machine hours are available, which product should be
manufactured?
(c) Prepare an analysis showing the total contribution margin if the additional hours are
(1) divided equally among the products, and (2) allocated entirely to the product identified in (b) above.

No comments:

Post a Comment