Solution Library

How To Maximize Profits With Only Marginal Increase Of Machine Utilization

Question

Pete’s Premium Pistols Ltd. manufactures three different products –handguns, rifles, and shotguns. Considerable market demand exists for all models. The following per unit data apply:

 

Handguns

Rifles

Shotguns

Selling price

$150

$20

$85

Direct materials

100

8

40

Direct labour ($20 per hour)

20

5

10

Variable support costs ($4 per machine hour)

9

1.8

10.8

Fixed costs                                         

8

4

20

Total expenses                       

138

19

82

Net income                           

$12

$1

$3

Required:

If machine utilization can only be increased by 10%, what should the company do to maximize profits?

 

Summary

The question belongs to Accounting and it discusses about maximizing profits on a machine when only 10% of the utilization is increased.

Total Word Count 108

Download Full Solution

Comments

  • HWA
    Rasha

    this is a very good website

  • HWA
    maani

    I have 50 questions for the same test your page is showing only 28

  • HWA
    joeanne

    hi can you please help or guide me to answer my assignments. thanks

  • HWA
    joeanne

    hi can anyone help or guide me to my assignments. thanks

  • HWA
    Monik


  • HWA
    Cristina

    This solution is perfect ...thanks

  • HWA
    Janete

    Hello Allison,I love the 2nd image that you did! I also, had never heard of SumoPaint, is something that I will have to exolpre a bit! I understand completely the 52 (or so) youtube videos that you probably watched. Sometimes they have what you want, sometimes they don't! However, it is always satisfying when you are able to produce something that you have taught yourself. Great job!Debra 0 likes

  • HWA
    Sandeep

    Perfect bank of solution. 

  • HWA
    Oxana

    great !

  • HWA
    Paul Brandon-Fritzius

    thanks for the quick response. the solution looks good. :)

  • HWA
    tina Johnson

    thnx for the answer. it was perfect. just the way i wanted it. 

  • HWA
    Giuseppe

    works fine.