# 24(09)-6A_9e - Contribution margin per furnace hour for...

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Problem 24(09)-6A Name: Section: Enter the appropriate amount in the shaded cells below. A red asterisk (*) will appear to the right of an incorrect amount in the outlined cells. 1. High Grade Good Grade Regular Grade Selling price Variable conversion cost per unit Direct materials cost per unit Total cost per unit Contribution margin per unit 2. High Grade Good Grade Regular Grade Contribution margin per unit Furnace (bottleneck) hours per unit ÷ Contribution margin per furnace hour 3. Revised price of High Grade steel: - = Furnace hours of High Grade per unit - = One way to revise the pricing would be to increase the price to the point where all three products produce profitability equal to the highest profit product. This would be determined as follows:

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Unformatted text preview: Contribution margin per furnace hour for Regular Grade Revised price of High Grade Variable cost per unit of High Grade Revised price of High Grade = Revised price of High Grade (Price required of High Grade to deliver the same contribution margin per bottleneck hour as does Regular Grade steel.) Revised price of Good Grade steel:-= Furnace hours of High Grade per unit-= = Revised price of Regular Grade (Price required of Regular Grade to deliver the same contribution margin per bottleneck hour as does Regular Grade steel.) Contribution margin per furnace hour for Regualr Grade Revised price of High Grade Variable cost per unit of High Grade Revised price of High Grade...
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## This note was uploaded on 10/22/2010 for the course BUSINESS BAIU09 taught by Professor Mr.ken during the Spring '10 term at American InterContinental University Dunwoody.

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24(09)-6A_9e - Contribution margin per furnace hour for...

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