Please help me and double check the answer! I will kindly thumbs up. Thank you s

Question

Please help me and double check the answer! I will kindly thumbs up. Thank you so much.

Excel Memory Company can sell a units of computer memory X and Y that it can produce, but it has limited production capacity. It can produce two units of X per hour or three units of Y per hour, and it has 4,450 production hours available. Contribution margin is $8 for product Xand $7 for product Y 1. Calculate contribution margin per production hour. Contribution Margin per Production Hour Product X Product Y Contribution margin per production hour 2. What is the most profitable sales mix for this Company? Allocate 40% its production capacity to Product X O Allocate 24% its production capacity to Product Y O Allocate all of its production capacity to Product Y O Allocate all of its production capacity to Productx

Explanation / Answer

1.contribution margin. Product X. Product Y

per production hour.   

  

Contribution per unit $8. $7

Units produced per hour. 2. 3

Contribution per hour 4. 2.33

2. Allocation of 100% production capacity to product Y

Reason :

A.Sales mix 40 % to x and 60% to Y.

X = 4450 × 40% =1780 hrs

Y = 4450 × 60% = 2670 hrs

Contribution X = 1780 /4 = 445 units

Contribution Y = 2670 /2.33 = 1145 units

Total 1590 units

B.allocate 24% to product Y

X = 4450 × 76% = 3382 hrs. Units = 3382/ 4 =845.5

Y = 1068 hrs , units = 1068/ 2.33 = 459

Total 1304

C. Allocate 100% to X , 4450 / 4 =1112.5 units

D. Allocate 100% to Y , 4450 / 2.33 = 1910 units

Hence it can be said allocation of 100 hrs to Y product is better.7

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