Problem 19-3A Product Economy Standard Deluxe Warning Don\'t show me this messag
ID: 2482209 • Letter: P
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Problem 19-3A
Product
Economy
Standard
Deluxe
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Product
Economy
Standard
Deluxe
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Economy
Standard
Deluxe
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Problem 19-3A
Tanek Industries manufactures and sells three different models of wet-dry shop vacuum cleaners. Although the shop vacs vary in terms of quality and features, all are good sellers. Tanek is currently operating at full capacity with limited machine time.Sales and production information relevant to each model follows.
Product
Economy
Standard
Deluxe
Selling price $43 $72 $144 Variable costs and expenses $17 $26 $60 Machine hours required 0.5 0.8 1.5Warning
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Calculate contribution margin per unit.Product
Economy
Standard
Deluxe
Contribution margin per unit $ $ $Warning
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Ignoring the machine time constraint, which single product should Tanek Industries produce?EconomyDeluxeStandard
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What is the contribution margin per unit of limited resource for each product? (Round answers to 2 decimal places, e.g.10.50.)Economy
Standard
Deluxe
Contribution margin per limited resource $ $ $Warning
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If additional machine time could be obtained, the additional time should be used to produce theEconomyDeluxeStandard
product.Warning
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Copyright © 2000-2016 by John Wiley & Sons, Inc. or related companies. All rights reserved.Explanation / Answer
Contribution Per Unit= Selling Price per unit- Variable cost Per unit.
1
Prodcut Deluxe is giving more contribution than remaining, Hence it is better to produce Deluxe
2
Last question is not clear, hence not answered.
Contribution Per Unit= Selling Price per unit- Variable cost Per unit.
Product Economy Standard Deluxe Selling Price 43 72 144 Variable Price 17 26 60 Contribution 26 46 84 Ranking 3 21
Prodcut Deluxe is giving more contribution than remaining, Hence it is better to produce Deluxe
Here Limited resource is Time, Hence we need to calculate contibution per hour Product Economy Standard Deluxe Selling Price 43 72 144 Variable Price 17 26 60 Contribution 26 46 84 Time require 0.5 0.8 1.5 Contribution per hour 52 57.5 56 Ranking 3 12