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    Argosy University/ Phoniex University/
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    Phoniex University
    Oct-2001 - Nov-2016

Category > Management Posted 01 Nov 2017 My Price 8.00

Gallard Company

Gallard Company has specialized machinery that can produce two types of metal housings. The machinery has a total operating capacity of 40,000 hours per year. Information on each of the two housings follows:

                                        Model A        Model B

 

Selling price

$20.00

$35.00

Unit variable cost

$15.00

$15.00

Each unit of model A requires one-half hour of machine time; each unit of model B requires 2.5 hours of machine time. The marketing manager has determined that the company can sell all that it can produce of each of the two products.

 

Required

1.    How many of each product should be sold to maximize total contribution mar- gin? What is the total contribution margin for this product mix?

2.    Suppose that Gallard can sell no more than 50,000 units of each type at the prices indicated. How many units of each type of rod should be produced? What would be the total contribution margin for this product mix?

Answers

Maurice Tutor
(5)
Status NEW Posted 01 Nov 2017 09:11 PM My Price 8.00

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