Grady enterprises manufactures three computer games they, Ask an Expert

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Grady Enterprises manufactures three computer games. They are called Rising Star, Ghost Master, and Road Warrior. The product line data are as follows:

Rising Ghost Road
Star Master Warrior
Current unit sales demand 20,000 30,000 18,000
Machine hours per unit 2.0 1.0 2.5
Selling price per unit $24.00 $18.00 $32.00
Unit variable manufacturing costs $12.50 $10.00 $18.75
Unit variable selling costs $6.50 $5.00 $6.25

The current production capacity is 110,000 machine hours.

1. Which computer game should be manufactured first? Which should be manufactured second? Which last?

2. How many of each type of computer game should be manufactured and sold to maximize the company's contribution margin based on the current production activity of 110,000 machine hours? What is the total contribution margin for that combination?

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Accounting Basics, Accounting

Category:- Accounting Basics
Reference No.:- M9978568

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