Question 1 Corvine Corporation makes two types of motors for use in various products. Operating data and unit cost information for its products are presented next. Product A Product B Annual unit capacity 10,000 20,000 Annual unit demand 10,000 20.000 $100 Selling price Variable manufacturing cost Fixed manufacturing cost $80 53 45 10 10 Variable selling and administrative 10 11 Fixed selling and administrative 5 Fixed other administrative 4 2 Unit operating profit $20 $10 Machine hours per unit 2.0 1.5 Corvine has 40,000 productive hours available. Required Calculate the relevant contribution margin, per machine hour for each product, to be utilized in making a decision on product priorities for the coming year.

Question 1 Corvine Corporation makes two types of motors for use in various products. Operating data and unit cost information for its products are presented next. Product A Product B Annual unit capacity 10,000 20,000 Annual unit demand 10,000 20.000 $100 Selling price Variable manufacturing cost Fixed manufacturing cost $80 53 45 10 10 Variable selling and administrative 10 11 Fixed selling and administrative 5 Fixed other administrative 4 2 Unit operating profit $20 $10 Machine hours per unit 2.0 1.5 Corvine has 40,000 productive hours available. Required Calculate the relevant contribution margin, per machine hour for each product, to be utilized in making a decision on product priorities for the coming year.

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter20: Inventory Management: Economic Order Quantity, Jit, And The Theory Of Constraints

Section: Chapter Questions

Problem 1CE: Thomas Corporation produces heating units. The following values apply for a part used in their...

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