How many machine hours does take to produce one xy

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Manufacturing Company produces two industrial solvents for which the following data havebeen tabulated. Fixed manufacturing cost is applied to products at a rate of $1.00 per machine hour.Per Unit XY-7 BD-4Selling price $6.45 $4.20Variable manufacturing costs 2.70 1.70Fixed manufacturing cost .70 .20Variable selling cost 1.80 1.75The sales manager has had a $215,000 increase in her budget allotment for advertising and wantsto apply the money on the most profitable product. The solvents are not substitutes for one another inthe eyes of the company's customers.

Question 1. How many machine hours does it take to produce one XY-7? To produce one BD-4? (Hint: Focuson applied fixed manufacturing cost.)

Question 2. Suppose Courcy has only 140,000 machine hours that can be made available to produce XY-7 andBD-4. If the potential increase in sales units for either product resulting from advertising is farin excess of these production capabilities, which product should be produced and advertised, andwhat is the estimated increase in contribution margin earned

Reference no: EM132540488

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