Answer Happy

Chapter 6 15 MARKS Ornix Inc. has a mix of sprinklers, valves, and controllers. You are required to use the information provided to determine the best use of the limited resource, machine hours: Selling Price: Sprinklers Valves Controllers $26.50 $11.20 $42.50 Machine hours required per unit: Sprinklers 0.65 Valves Controllers Sprinklers Valves Controllers 0.15 0.75 Variable manufacturing cost per unit: $13.96 $7.95 $29.75 Variable selling and administrative expenses per unit: Sprinklers Valves Controllers $1.30 $0.50 $3.41 Required: 6 Marks 3 Marks a) Compute the contribution margin per unit for each product. b) Compute the contribution margin per unit of limited resource. c) If an additional 300 machine hours could be obtained, how should the additional time be used? Give your reason. 2 Marks d) Prepare an analysis showing the total contribution margin if the additional 300 hours are (1) divided equally among all products, and (2) allocated entirely to the product identified in (c) above. 4 Marks