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Colt Company owns a machine that can produce two specialized products. Production time for Product TLX is two units per hour and for Product MTV is four units per hour. The machine's capacity is 2,500 hours per year. Both products are sold to a single customer who has agreed to buy all of the company's output up to a maximum of 4,250 units of Product TLX and 1,990 units of Product MTV. Selling prices and variable costs per unit to produce the products follow. S per unit Product TLX Product MTV Selling price per unit 13.50 S 8.10 Variable costs per unit 4.05 4.86 Determine the company's most profitable sales mix and the contribution margin that results from that sales mix. (Round per unit contribution margins to 2 decimal places.)

Colt Company owns a machine that can produce two specialized products. Production time for Product TLX is two units per hour and for Product MTV is four units per hour. The machine's capacity is 2,500 hours per year. Both products are sold to a single customer who has agreed to buy all of the company's output up to a maximum of 4,250 units of Product TLX and 1,990 units of Product MTV. Selling prices and variable costs per unit to produce the products follow. S per unit Product TLX Product MTV Selling price per unit 13.50 S 8.10 Variable costs per unit 4.05 4.86 Determine the company's most profitable sales mix and the contribution margin that results from that sales mix. (Round per unit contribution margins to 2 decimal places.)

Managerial Accounting
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter5: Support Department And Joint Cost Allocation
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Colt Company owns a machine that can produce two specialized products. Production time for Product TLX is two units per hour and for Product MTV is four units per hour. The machine's capacity is 2,500 hours per year. Both products are sold to a single customer who has agreed to buy all of the company's output up to a maximum of 4,250 units of Product TLX and 1,990 unts of Product MTV. Selling prices and variable costs per unit to produce the products follow. S per unit Product TLX Product MTV Selling price per unit 13.50 S 8.10 Variable costs per unit 4.05 4.86 Determine the company's most profitable sales mix and the contribution margin that results from that sales mix. (Round per unit contribution margins to 2 decimal places.)
Transcribed Image Text:Colt Company owns a machine that can produce two specialized products. Production time for Product TLX is two units per hour and for Product MTV is four units per hour. The machine's capacity is 2,500 hours per year. Both products are sold to a single customer who has agreed to buy all of the company's output up to a maximum of 4,250 units of Product TLX and 1,990 unts of Product MTV. Selling prices and variable costs per unit to produce the products follow. S per unit Product TLX Product MTV Selling price per unit 13.50 S 8.10 Variable costs per unit 4.05 4.86 Determine the company's most profitable sales mix and the contribution margin that results from that sales mix. (Round per unit contribution margins to 2 decimal places.)
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