Edgerron Company is able to produce two products, G and B, with the same machine
ID: 2572836 • Letter: E
Question
Edgerron Company is able to produce two products, G and B, with the same machine in its factory. The following information is available.
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 $4,000 additional fixed costs per month. (Round hours per unit answers to 1 decimal place. Enter operating losses, if any, as negative values.)
Edgerron Company is able to produce two products, G and B, with the same machine in its factory. The following information is available.
Explanation / Answer
Operating income or loss after the new machine:-
Per month
Product G Ptoduct B
Total contribution margin after machine (1200*40)48000 (400*32)12800 Fixed cost combined (4000)
total operating income combined per month 48000+12800-4000=56800
total operating income combined per day 56800/22=60618.1
total operating income combined per hour 60618/16=3788.6
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