X Question 2. A company produces three products with the foliowing costs and sel

Question

X Question 2. A company produces three products with the foliowing costs and selling prices: ound Sauare Trangle Product Name Selling Price Per Unit S24 26 $20 Variable Cost Per Unit $10 $12 Machine Hours Per Unit 2 The company has a limit of 14.600 machine hours available per moath The company has a month fixed cost of $30.000. The demand for each of the prodacts is 2.500 umits per month. The company goal is to maximize its profitability Suppose the company can rent a machine that will prov ide an aáditional 800 machine hours per month. What is the maximum monthly rent the company ould be willing to pay for this machine? A. $2,000 B. $4,200 C. $2,400 D. $1,200 E. $2,800 3. Verona Tech is a vocation school. The school buses its budgets on wo measures of activity number of students and number of courses. The school uses the xed cost Variable cost perVarabile cost per per month Faculty wages 4,000 s50 32 Course supplies STO $20 Administrative expenses n July, the school bud Number of Students Number of Courses Faculty wages Course supplies Administrative expenses geted for 300 students and 15 coures. Actual results frthemmhappear 21 4.200 $4.800 $8.300 What is the spending variance for course supplies (choose the ciosent anmwr A. $100 U B. $50 U C. $100 F D. $50 F . $350 F

Explanation / Answer

Question:2 Answer is option© $2400 Computation of Contribution Per machine Hour Product Round Square Triangle Selling price Per unit 24 26 20 variable cost per unit 10 10 12 Contribution per unit 14 16 8 Machine hours per unit 2 4 4 Contribution Per machine hour 7 4 2 Ranking I II III Total demand 2500 2500 2500 Total required Hours (Machine hours per unit*demand 5000 10000 10000 Allocation of Available hours 14600 5000 9600 14600-5000 incase of Purchasing 800 Machine hours, they first used to Suare , then remaining hours for traingle.Maximum Price that can be paid for these Hours is equal to contribution generated from them Square Traingle Hours used   (800) 400 400 Contribution Per hour 4 2 Total contribution 1600 800 So maximum Price tht can be paid is $2400 ($1600+$800)

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