Colt Company owns amachine that can produce two specialized products. Production timefor Product TLX...Colt...

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Accounting

Colt Company owns amachine that can produce two specialized products. Production timefor Product TLX is three units per hour and for Product MTV is fourunits per hour. The machine’s capacity is 2,100 hours per year.Both products are sold to a single customer who has agreed to buyall of the company’s output up to a maximum of 3,570 units ofProduct TLX and 4,080 units of Product MTV. Selling prices andvariable costs per unit to produce the products follow.
$ per unit Product TLX Product MTV
Selling priceper unit $ 14.00 $ 8.40
Variable costsper unit 4.20 5.04

Determine the company's most profitable sales mix and thecontribution margin that results from that sales mix.(Round per unit contribution margins to 2 decimalplaces.)
ProductTLX ProductMTV
Contribution margin per unit
Contribution margin per production hour
Product TLX Product MTV Total
Maximumnumber of units to be sold 3,570 4,080
Hoursrequired to produce maximum units
For MostProfitable Sales Mix Product TLX Product MTV Total
Hoursdedicated to the production of each product
Unitsproduced for most profitable sales mix
Contribution margin per unit
Totalcontribution margin

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3.6 Ratings (434 Votes)

Working Product TLX Product MTV A Contribution margin per unit 980 336 B production hours per unit 0333333 0250000 C AB Contribution margin See Answer

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In: AccountingColt Company owns amachine that can produce two specialized products. Production timefor Product TLX...Colt Company owns amachine that can produce two specialized products. Production timefor Product TLX is three units per hour and for Product MTV is fourunits per hour. The machine’s capacity is 2,100 hours per year.Both products are sold to a single customer who has agreed to buyall of the company’s output up to a maximum of 3,570 units ofProduct TLX and 4,080 units of Product MTV. Selling prices andvariable costs per unit to produce the products follow.$ per unitProduct TLXProduct MTVSelling priceper unit$14.00$8.40Variable costsper unit4.205.04Determine the company's most profitable sales mix and thecontribution margin that results from that sales mix.(Round per unit contribution margins to 2 decimalplaces.)ProductTLXProductMTVContribution margin per unitContribution margin per production hourProduct TLXProduct MTVTotalMaximumnumber of units to be sold3,5704,080Hoursrequired to produce maximum unitsFor MostProfitable Sales MixProduct TLXProduct MTVTotalHoursdedicated to the production of each productUnitsproduced for most profitable sales mixContribution margin per unitTotalcontribution margin

$ per unit	Product TLX			Product MTV
Selling priceper unit		$	14.00		$	8.40
Variable costsper unit			4.20			5.04