Shore Company manufactures and sells three products. Relevant per unit data conc

Question

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

Product A B C Selling price $15 $15 $20 Variable costs and expenses $7 $13.00 $16 Machine hours to produce 2 1 2 Shore Company manufactures and sells three products. Relevant per unit data concerning each product are given below.

Product A B C Selling price $15 $15 $20 Variable costs and expenses $7 $13.00 $16 Machine hours to produce 2 1 2 Product A B C Product A Product B Product C Exercise 19-11. Accounting help

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

Product A B C Selling price $15 $15 $20 Variable costs and expenses $7 $13.00 $16 Machine hours to produce 2 1 2

Explanation / Answer

a)

margin par hour = ( Selling price - variable costs)/machine hours

Product A

= (15-7)/2 = $4

Product B

= (15-13)/1 = $2

Product C

= (20 -16)/2 = $2

b)

Product A should be manufactured since
Contribution margin per unit of limited resource for A is $ 4

Total contribution margin = 4*1710 = $6840

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