Business, 10.08.2021 19:00, lyssssasantiago9844

Bee Company is able to produce two products, G and B, with the same machine in its factory. The following information is available. Product G Product B
Selling price per unit $170 $200
Variable costs per unit $70 $120
Contribution margin per unit $100 $80
Machine hours to produce 1 unit 0.4 hours 1.0 hours
Maximum unit sales per month 550 units 200 units

The company presently operates the machine for a single eight-hour shift for 22 working days each month. Management is thinking about operating the machine for two shifts, which will increase its productivity by another eight hours per day for 22 days per month. This change would require $10,000 in additional fixed costs per month. (Round hours per unit answers to 1 decimal place. Enter operating losses, if any, as negative values.)

Required:
a. If the company adds another shift, how many units of product G and Product B should it produce? How much total contribution margin would this mix produce each month?
b. Suppose that the company determines that it can increase product G?s maximum sales to 600 units per month by spending $9000 per month in marketing efforts. Should the company pursue this strategy and the double shift?

Answers: 1

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Bee Company is able to produce two products, G and B, with the same machine in its factory. The foll...