Question

Waterways packages some of its products into sets for home installations. One set (small) sells for $77 with variable costs of production for the set at $50. Another set (large) sells for $152 with variable costs of $100. The parts for the $77 set take 9 machine hours to produce. The parts for the $150 set take 20 machine hours to produce.Given the information above, and assuming all of the package sets produced can be sold each month, illustrate the best use of machine hours. (Round answers to 2 decimal places, e.g. 5.25.)Contribution margin per unit of limited resourceSmall Set ________________Large Set_______________

Answer 1

Answer:

Instructions are listed below.

Explanation:

Giving the following information:

One set (small) sells for $77 with variable costs of production for the set at $50. Another set (large) sells for $152 with variable costs of $100.

Contribution margin= selling price - unitary variable cost

Contribution margin Small Set= 77 - 50= $27 per unit.

Contribution margin Large Set= 152 - 100= $52 per unit.