ttps//edugen.wileyplus.com/edugen/lti/main.uni Return to Blackboard Kimmel, Acco

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ttps//edugen.wileyplus.com/edugen/lti/main.uni Return to Blackboard Kimmel, Accounting, 6e Heln I System Announcements ment Exercise 19-11 Mars Company manufactures and sells three products. Relevant per unit data concerning each product are given below: Product Selling price Variable costs and expenses Machine hours to produce $9 $14 $16 $5 $11 $13 Compute the contribution margin per unit of limited resource (machine hours) for each product. (Round contribution margin per unit to 2 decimal places, e.g. 1.25.) Product A Product B Product C Contribution margin per unit of limited resource LINK TO TEXT Assuming 3,000 additional machine hours are available, which product should be manufactured? LINK TO TEXT All Rights Reserved. A Division of lohn Wiley &Sons.Ins;

Explanation / Answer

1 A B C Selling price 9 14 16 Variable cost and expense 5 11 13 Contribution margin 4 3 3 Machine hours 2 1 2 Contribution margin per machine hour 2 3 1.5 2 Contributin margin per machine hour is max in B so B should be manufactured 3 A B C A Contribution margin per machine hour 2 3 1.5 Machine hours 1000 1000 1000 Contribution margin 2000 3000 1500 Total contribution margin 6500 B Product identified is B Contribution margin per machine hour 3 Machine hours 3000 Contribution margin 9000

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