Colt Company Produces Two Skateboard Models Machine Time Per Unit For Hero Is Two Hours And For Flip Is One Hour The M 1 (24.65 KiB) Viewed 13 times
Colt Company produces two skateboard models. Machine time per unit for Hero is two hours and for Flip is one hour. The machine's capacity is 1,640 hours per year. Colt can sell up to 524 units of Hero and 892 units of Flip per year. Selling prices and variable costs follow. Hero $ 150 Flip $95 Selling price per unit Variable costs per unit 50 55
(a) Compute the contribution margin per machine hour for each product. Hero Contribution margin per unit Contribution margin per machine hour (b) Determine the best sales mix of products. Hero Units produced and sold for most profitable sales mix Hours required to produce most profitable sales mix (c) Compute the total contribution margin for the best sales mix. Units produced for most profitable sales mix Contribution margin per unit Total contribution margin Hero Flip Flip Flip Total Total
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