Thorne Company manufactors and sells three products . Relevant per unit data con

Question

Thorne Company manufactors and sells three products . Relevant per unit data concerning each product are given

product
a b c

selling price 13.23 15.05 14.75
variable cost and expenses 3.06 9.63 11.81
machine hours to produce 3 2 2

compute the contribution margin per unit of the limited resource (machine hours) for each product (round answers to decimal places e.g. 10.50)

product a
product b
prodcut c

assuming 1500 additional machine hours are availble which product should be manufactured

complete the analysis showing the total contribution margin if the additional hours are (1) divided equally among the products , and allocated entirely to the product identified in (b) above (round contribution margin to 2 decimal places , e.g. 10.50)
divided equally among the products:
Products
a b c

machine hours
contribution margin per unit
of limited resource
Total contribution margin

total contribution margin is

allocated entirely to the product identified above

machine hours
contribution margin per unit of limited resource
total contribution margin

Explanation / Answer

Contribution margin per unit of the limited resources: For product a: Selling price is 13.23 Variable cost and expenses is 3.06 Contribution margin per unit is = Sellling price per unit - Variable cost per unit                                                       = 13.23 - 3.06                                                       = 10.17 Contribution margin per unit is 10.17. For product b: Sellling price per unit is 15.05 Variable cost and expenses is 9.63 Contribution margin per unit is = 15.05 - 9.63                                                       = 5.42 Contribution margin per unit is 5.42 For product c: Selling price per unit is 14.75 Variable cost and expenses is 11.81 Contribution margin per unit is = 14.75 - 11.81                                                      = 2.94 Contribution margin per unit is 2.94 For product a: Selling price is 13.23 Variable cost and expenses is 3.06 Contribution margin per unit is = Sellling price per unit - Variable cost per unit                                                       = 13.23 - 3.06                                                       = 10.17 Contribution margin per unit is 10.17. For product b: Sellling price per unit is 15.05 Variable cost and expenses is 9.63 Contribution margin per unit is = 15.05 - 9.63                                                       = 5.42 Contribution margin per unit is 5.42 For product c: Selling price per unit is 14.75 Variable cost and expenses is 11.81 Contribution margin per unit is = 14.75 - 11.81                                                      = 2.94 Contribution margin per unit is 2.94 Total contribution margin: Machine hours are 1500/3 = 500 added to each machine. For product a: Selling price is 13.23. variable cost and expenses is 3.06 Machine hours is 503. Per unit cost is 500/3 = 166.667 Contibution margin is = (13.23 - 3.06)*166.667                                       = 1,695 For product b: Selling price per unit is 15.05 Variable cost and expenses is 9.63 Total machine hours is 502 Per unit cost is 502/2 = 251 Contribution margin is = (15.05-9.63)*251                                        = 1,360.42 For product C: Selling price per unit is 14.75 Variable cost and expenses is 11.81 Total machine hours 502 per unit cost is 502/2 = 251 Contribution margin per unit is = (14.75 - 11.81)*251                                                       = 737.94 machine hours   = 503 , 502 , 502
contribution margin per unit
of limited resource            = 10.17 , 5.42 , 2.94
Total contribution margin = 1695 , 1360.42 , 737.94

    Machine hours are 1500/3 = 500 added to each machine. For product a: Selling price is 13.23. variable cost and expenses is 3.06 Machine hours is 503. Per unit cost is 500/3 = 166.667 Contibution margin is = (13.23 - 3.06)*166.667                                       = 1,695 For product b: Selling price per unit is 15.05 Variable cost and expenses is 9.63 Selling price per unit is 15.05 Variable cost and expenses is 9.63 Total machine hours is 502 Per unit cost is 502/2 = 251 Contribution margin is = (15.05-9.63)*251                                        = 1,360.42 For product C: Selling price per unit is 14.75 Variable cost and expenses is 11.81 Selling price per unit is 14.75 Variable cost and expenses is 11.81 Total machine hours 502 per unit cost is 502/2 = 251 Contribution margin per unit is = (14.75 - 11.81)*251                                                       = 737.94 machine hours   = 503 , 502 , 502
contribution margin per unit
of limited resource            = 10.17 , 5.42 , 2.94
Total contribution margin = 1695 , 1360.42 , 737.94

   

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.