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Bethel Company owns a machine that can produce two specialized products. Production time for Product 1 answer below » Bethel Company owns a machine that can produce two specialized products. Production time for Product TLX is two units per hour and for Product MTV is four units per hour. The machine’s capacity is 2,400 hours per year. Both products are sold to a single customer who has agreed to buy all of the company’s output up to a maximum of 4,080 units of Product TLX and 1,790 units of Product MTV. Selling prices and variable costs per unit to produce the products follow. Product TLX Product MTV Selling price per unit $ 11.00 $ 6.60 Variable costs per unit 3.30 3.96 View complete question » Bethel Company owns a machine that can produce two specialized products. Production time for Product TLX is two units per hour and for Product MTV is four units per hour. The machine’s capacity is 2,400 hours per year. Both products are sold to a single customer who has agreed to buy all of the company’s output up to a maximum of 4,080 units of Product TLX and 1,790 units of Product MTV. Selling prices and variable costs per unit to produce the products follow. Product TLX Product MTV Selling price per unit $ 11.00 $ 6.60 Variable costs per unit 3.30 3.96 Document Preview: Bethel Company owns a machine that can produce two specialized products. Production time for Product TLX is two units per hour and for Product MTV is four units per hour. The machine’s capacity is 2,400 hours per year. Both products are sold to a single customer who has agreed to buy all of the company’s output up to a maximum of 4,080 units of Product TLX and 1,790 units of Product MTV. Selling prices and variable costs per unit to produce the products follow. Product TLX Product MTV Selling price per unit $ 11.00 $ 6.60 Variable costs per unit 3.30 3.96 (1) Determine the company’s most profitable sales mix. Product TLX units Product MTV units (2)Determine the contribution margin that results from that sales mix. Contribution margin 3.A company must decide between scrapping or reworking units that do not pass inspection. The company has 12,000 defective units that cost $5.30 per unit to manufacture. The units can be sold as is for $2.50 each, or they can be reworked for $3.50 each and then sold for the full price of $9.20 each. If the units are sold as is, the company will also be able to build 12,000 replacement units at a cost of $5.30 each, and sell them at the full price of $9.20 each. What is the incremental income from reworking and selling the units?
Additional Requirements Level of Detail: Show all work Attachments: Q.docx View less » Jul 28 2015 04:03 PM
