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Exercise 25-6 Sales mix determination and analysis P3
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 five units per hour. The machine's capacity is 2,750 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 4,700 units of Product TLX and 2,500 units of Product MTV. Selling prices and variable costs per unit to produce the products follow. Determine (1) the company's most profitable sales mix and (2) the contribution margin that results from that sales mix.
$ Per unit
product TLX
Product MTV
Selling price per unit.......................... $15.00 $9.50
Variable costs per unit......................... 4.80 5.50
Check (2) $55,940
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- Question 9Company J sells a product in two models. The basic model has a contribution margin per unit of $5. The deluxe model has a CM per unit of $12. Total fixed costs for the year are $100,000. Which of the following sales mixes can Company J sell to break even? Basic model: 8,000 units; deluxe model: 4,500 units Basic model: 8,000 units; deluxe model: 5,000 units Basic model: 7,500 units; deluxe model: 5,000 units Basic model: 7,700 units; deluxe model: 5,200 unitsarrow_forward12 Our company currenty makes and sells two products: A and B. The relative number of production and sales between A and B is 2:3. In other words, each time the company produces and sells two units of product A, it produces and sells three units of product B. The following cost information is available: Company A В Unit Selling Price $11 $15 Unit Varible Cost $5 $7 Total fixed expenses $15,000 How much sales volume does the company need to make from Product B if it wants to achieve $3,000 profits? (Do not round intermediate calculations. Round the final answer to the nearest units.) А. 1,500 units В. 1,340 units C. 893 units D. 1,000 units Е. None of the abovearrow_forwardQUESTION 4 An organisation manufactures a single product. The following information with regard to the raw material needed in the production process is supplied to you: Normal delivery time: 2.5 weeksMaximum delivery time: 3.5 weeksNormal usage: 52 000 units per yearPurchase price per unit: R8.50Cost of placing an order: R18.00Interest rate: 2% per yearStoring cost per unit: R2.50 Required: Calculate the re-order point if the organisation has a policy to keep safety stock. Calculate the safety stock that should be kept by the organisation.arrow_forward
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