(Solved): Colt Company produces two skateboard models. Machine time per unit for Hero is two hours and for ...

Colt Company produces two skateboard models. Machine time per unit for Hero is two hours and for Flip is one hour. The machine's capacity is 1,640 hours per year. Colt can sell up to 524 units of Hero and 892 units of Flip per year. Selling prices and variable costs follow. Hero Flip $ 150 Selling price per unit Variable costs per unit 50 $ 95 55 (a) Compute the contribution margin per machine hour for each product. Hero Selling price per unit $ Fixed costs Contribution margin per unit $ Machine hours per unit Contribution margin per machine hour (b) Determine the best sales mix of products. Units produced and sold for most profitable sales mix Hours required to produce most profitable sales mix (c) Compute the total contribution margin for the best sales mix. Hero Units produced for most profitable sales mix Contribution margin per unit $ Total contribution margin $ Hero 150 (50) 100 2 50 524 1,028 $ $ 524 78,600 $ 41,186,400 $ Flip Flip Flip 95 (55) 40 1 40 612 612 612 58,140 35,581,680 Total 1,640 Total $76,768,080