Best writers. Best papers. Let professionals take care of your academic papers

Order a similar paper and get 15% discount on your first order with us
Use the following coupon "FIRST15"
ORDER NOW

P25-5B Digits Company is able to produce two products, 22 and 44, with the same

/in /by

P25-5B Digits Company is able to produce two products, 22 and 44, with the same machine in its factory. The following information is available.   Product 22       Product 44 Selling price per unit . . . . . . . . . . . . . . . . . . .              $175                $200 Variable costs per unit . . . . . . . . . . . . . . . . . .                         100                  150 Contribution margin per unit . . . . . . . . . . . .                $ 75                 $ 50 Machine hours to produce 1 unit . . . . . . . . .               0.8 hours         0.5 hours Maximum unit sales per month . . . . . . . . . . .              525 units          450 units   The company presently operates the machine for a single eight-hour shift for 23 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 23 days per month. This change would require $5,000 additional fixed costs per month.   Required 1. Determine the contribution margin per machine hour that each product generates.   2. How many units of Product 22 and Product 44 should the company produce if it continues to operate with only one shift? How much total contribution margin does this mix produce each month?   3. If the company adds another shift, how many units of Product 22 and Product 44 should it produce? How much total contribution margin would this mix produce each month? Should the company add the new shift? Explain.   4. Suppose that the company determines that it can increase Product 44�s maximum sales to 500 units per month by spending $500 per month in marketing efforts. Should the company pursue this strategy and the double shift? Explain. Check Units of Product 44: (2) 368, (3) 450, (4) 500

The post P25-5B Digits Company is able to produce two products, 22 and 44, with the same appeared first on PAPER WRITE.

 
Looking for a Similar Assignment? Order now and Get 10% Discount! Use Coupon Code "Newclient"