Limiting Factor - Essay Example

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Limiting Factor

76.00 ?116.00 Contribution Margin % 10.48% 8.64% 9.67% Total Sales ?12,600,000.00 ?10,560,000.00 ?14,400,000.00 Total Unit Costs ?11,280,000.00 ?9,648,000.00 ?13,008,000.00 Total Contribution Margin ?1,320,000.00 ?912,000.00 ?1,392,000.00 Fixed overhead(?2,400,000) Total Income ?1,224,000.00 New Production Budget product x product y product z Projected Unit sales 18000 15000 15996 Selling Price per Unit ? 840 880 1200 Contribution Margin ?88.00 ?76.00 ?116.00 Contribution Margin % 10.48% 8.64% 9.67% Total Sales 15120000 13200000 19195200 Total Unit Costs ?13,536,000.00 ?12,060,000.00 ?17,339,664.00 Total Contribution Margin ?1,584,000.00 ?1,140,000.00 ?1,855,536.00 Total Income ?2,179,536.00 Profit Maximizing Production Budget product x product y product z Projected Unit sales 18000 15000 7800 Selling Price per Unit ? 840 880 1200 Contribution Margin ?88.00 ?76.00 ?116.00 Contribution Margin % 10.48% 8.64% 9.67% Total Sales ?15,120,000.00 ?13,200,000.00 ?9,360,000.00 Total Unit Costs ?13,536,000.00 ?12,060,000.00 ?8,455,200.00 Total Contribution Margin ?1,584,000.00 ?1,140,000.00 ?904,800.00 Total Income ?1,228,800.00 1) The following current production budget was prepared at the end of our fiscal year following a recessionary period resulting in reduced demand for our product line. ...Show more

Summary

product x product y product z ? per unit ? per unit ? per unit Standard costs Direct materials 200 480 360 Variable overhead 48 28 64 Rate per hour ? Hours per unit Hours per unit Hours per unit Department A 10 28 16 30 Department B 12 8 6 10 Department C 8 16 8 30 Unit Costs: product x product y product z Direct materials 200 480 360 Total Labor ?…
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