Sales Mix Decision GAME Enterprises manufactures three computer games called Roc

Question

Sales Mix Decision

GAME Enterprises manufactures three computer games called Rocket Star, Game Master, and Rock Warrior. The product line data follow.

The current production capacity is 100,000 machine hours.

1. Which computer game should be manufactured first?
SelectRocket StarGame MasterRock WarriorItem 1

Which computer game should be manufactured second?
SelectRocket StarGame MasterRock WarriorItem 2

Which computer game should be manufactured last?
SelectRocket StarGame MasterRock WarriorItem 3

2. How many of each type of computer game should be manufactured and sold to maximize the company's contribution margin based on the current production activity of 100,000 machine hours?

What is the total contribution margin for that combination?

Rocket Star Game Master Rock Warrior Current unit sales demand 20,000    30,000    18,000    Machine hours per unit 2.0    1.0    2.5    Selling price per unit $20.00    $16.00    $30.00    Unit variable manufacturing costs $12.50    $10.00    $18.75    Unit variable selling costs $6.50    $5.00    $6.25   

Explanation / Answer

Statement showing computations Particulars Rocket Star Game Master Rock Warrior Selling price per unit                            20.00                    16.00                                    30.00 Varable Costs Unit variable selling costs                              6.50                      5.00                                      6.25 Unit variable manufacturing costs                              12.50                    10.00                                    18.75 Total Variable Costs                            19.00                    15.00                                    25.00 Contribution per unit = SP-VC                              1.00                      1.00                                      5.00 Machine Hours per unit                              2.00                      1.00                                      2.50 Contribution per Machine hour = Cont/MH                              0.50                      1.00                                      2.00 Ranking                              3.00                      2.00                                      1.00 Total Machine hours available                 100,000.00 Hours to Rock Warrior = 18,000*2.5                   45,000.00 Balance Machine hour available                   55,000.00 Hours togame Master = 30,000*1                   30,000.00 Balance Machine hour available                   25,000.00 Units of Rocket Star = 25,000/2                   12,500.00 Particulars Rocket Star Game Master Rock Warrior Total Contribution per unit = SP-VC                              1.00                      1.00                                      5.00 No of units                   12,500.00           30,000.00                            18,000.00 Total Contribution Margin                   12,500.00           30,000.00                            90,000.00      132,500.00

Related Questions

Navigate

• Browse (All)
• Browse S
• Subjects

---

---

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