CH 11 Collaboration

# CH 11 Collaboration - 5,400 MH Pelta 39,000 units = 39,000...

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Saikat Mitra Chapter 11 Collaboration Problem Cost Accounting 11-42 1. Units(1) Machine Hrs Per Unit(2) Machine Hrs Demanded (3) = (1) × (2) Nealy 1,800 \$600 ÷ \$200 = 3 5,400 Tersa 4,500 \$500 ÷ \$200 = 2.5 11,250 Pelta 39,000 \$200 ÷ \$200 = 1 39,000 Total 55,650 2. Nealy Tersa Pelta Selling price \$3,000 \$2,100 \$800 Variable costs: Direct materials 750 500 100 Variable machining 600 500 200 Sales commissions (5%, 5%, 10%) 150 105 80 Total variable costs 1,500 1,105 380 Contribution margin per unit \$1,500 \$ 995 \$420 3. Nealy Tersa Pelta Unit contribution margin \$1,500 \$995 \$420 Machine hours per unit ÷3 ÷2.5 ÷1 Unit contribution margin per \$ 500 \$398 \$420 Optimal product mix:

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Nealy 1,800 units =
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Unformatted text preview: 5,400 MH Pelta 39,000 units = 39,000 MH Tersa 2,240 (5,600 MH Ã· 2.5 MH/unit) units = 5,600 MH (50,000 â”€ 5,400 â”€ 39,000) Total 50,000 MH 4. The optimal product mix in Part 3 satisfies the demand for Nealy and Pelta and leaves only 2,260 units (4,500 â”€ 2,240) of Tersa unfilled. These remaining units of Tersa require 5,650 machine hours (2,260 units* 2.5 MH per unit). The maximum price Marion Taylor is willing to pay for extra machine hours is \$398, which is the unit contribution per machine hour for additional units of Tersa. So, total cost per machinehour for these units will be \$398 + \$200 = \$598 per machinehour....
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## This note was uploaded on 12/12/2011 for the course ECON 121 taught by Professor N/a during the Spring '11 term at Butler Community College.

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CH 11 Collaboration - 5,400 MH Pelta 39,000 units = 39,000...

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