3-44 CVP analysis. The Germa company produces two products, Spick and Span, on one machine.Spick and Span cannot be made simultaneously. There is no time required to adjust the machine whenswitching from one product to the other. One unit of Spick requires 2 machine hours to produce, whereasone unit of Span requires 4 hours. The normal occupation of the machine is 6,000 hours per year. The fixedcosts of the machine are $120,000 annually. One unit of Spick needs 2 kg of material A, whereas one unit ofSpan requires 3 kg. The budgeted price for 1 kg of material A is $4.The sales costs consist only of fixed costs, which are budgeted at $40,000 a year. The allocated fixed salescosts per product are $20.1. Calculate the cost per product for Spick and Span.Theselling price for Spick is $70 and for Span it is $120.2. Calculate the breakeven revenue when 50% of the units sold are Spick and 50% are Span.3. When material shortage causes a bottleneck, which product should be produced and sold first?R

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Answered: 1. Calculate the cost per product for…

Practical Management Science

6th Edition

ISBN:9781337406659

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Publisher:WINSTON, Wayne L.

Chapter2: Introduction To Spreadsheet Modeling

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Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...

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1. Calculate the cost per product for Spick and Span. The selling price for Spick is $70 and for Span it is $120. 2. Calculate the breakeven revenue when 50% of the units sold are Spick and 50% are Span. 3. When material shortage causes a bottleneck, which product should be produced and sold first?