Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. gunst company produces three video games: android,

Gunst Company produces three video games: Android, Bio-Mutant, and Cyclops. Cost and revenue data pertaining to...

Free

90.2K

Verified Solution

Question

Accounting

Gunst Company produces three video games: Android, Bio-Mutant,and Cyclops. Cost and revenue data pertaining to each product areas follows:

AndroidBio-MutantCyclops
  Selling price$100$55$125
  Direct labor482460
  Direct materials9816
  Variable overhead749

At the present time, demand for each of the company's productsfar exceeds its capacity to produce them. Thus, management istrying to determine which of its games to concentrate on next weekin filling its backlog of orders. Gunst's direct labor rate is $12per hour, and only 1,000 hours of direct labor are available eachweek.

Determine the maximum total contribution margin the company canmake by its best use of the 1,000 available hours. (Do notround intermediate calculations.)

Answer & Explanation Solved by verified expert
4.2 Ratings (852 Votes)

Additional Units produced and sold for Bio Mutant (1000/2)=500

Maximum contribution will; be =$ 9500

Sales $   27,500.00
Variable cost per unit (500 x 36) $   18,000.00
Contribution margin $     9,500.00

Working

the unit that gives highest contribution margin per limited resourse should be produced.

Android Bio mutant Cyclops
Labor cost 48 24 60
Labor rate 12 12 12
Labor hours per unit 4 2 5
Statement of ranking indicating which product to produced first, second and third
Product
Android Bio mutant Cyclops
Sales price per unit $    100.00 $ 55.00 $        125.00
Variable cost per unit $       64.00 $ 36.00 $           85.00
Contribution margin per unit $       36.00 $ 19.00 $           40.00
Labor hour per unit             4.00         2.00                 5.00
Contribution margin per Labor hour $         9.00 $    9.50 $             8.00
Ranking II I III

Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Zin AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Q

Ages 15 18 19 22 23 26 27 30 31 34 35 38 Number of...

Statistics
Q

There are many similarities within our own bodies and the upper extremity often mirrors the lower...

Medical Sciences
Q

This requirement can be met by using generic data, the correct mysql coding of script is...

Programming
Q

Complete the function main in file median.c to implement the computation of the median of a...

Electrical Engineering
Q

READING TEXT: Fleeing Facebook Carmen Joy King 1 In March, at the peak of Facebook popularity,...

Psychology
Q

Describe or correct the error in solving the system of linear equations AND show your...

Basic Math
Q

Suppose that a wheel whose diameter is 25 inches rolls along a flat surface at...

Basic Math
Q

An engineer has designed a valve that will r the mean pressure was 7 5...

Statistics
Q

Suppose an organization intends to give you a short-term contract to carry out linear measurements...

Accounting
Q

Allocating Overhead versus Direct Tracing Nixon & Ross, a law firm, is about to install...

Accounting
Q

An accounting clerk for Chesner Co. prepared the following bank reconciliation: Chesner...

Accounting
Q

Journalize the following transactions: 1. June 3. Received $1,200 from Bob Jones. Used the Direct...

Accounting