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Ortiz Company is able to produce two products, G and B, with the same machine in its factory. The following information is available.

	Product G						Product B
Selling price per unit			$	200					$	140
Variable costs per unit				40						80
Contribution margin per unit			$	160					$	60
Machine hours to produce 1 unit		0.4	hours					2.0	hours
Maximum unit sales per month		840	units					200	units

The company presently operates the machine for a single eight-hour shift for 22 working days each month. Management is thinking about operating the machine for two shifts, which will increase its productivity by another eight hours per day for 22 days per month. This change would require $6,400 additional fixed costs per month.

Required:
1.	Determine the contribution margin per machine hour that each product generates. (Round your final answers to the nearest dollar amount. Omit the "$" sign in your response.)

	Product G	Product B
Contribution margin per machine hour	$	$

2(a)	How many units of Product G and Product B should the company produce if it continues to operate with only one shift? (Leave no cells blank - be certain to enter "0" wherever required.)

Product G		units
Product B		units

2(b)	How much total contribution margin does this mix produce each month? (Omit the "$" sign in your response.)

Total contribution margin

$

3(a)	If the company adds another shift, how many units of Product G and Product B should it produce?

Product G		units
Product B		units

3(b)	How much total contribution margin would this mix produce each month? (Amounts to be deducted should be indicated with a minus sign. Omit the "$" sign in your response.)

Product G	$
Product B
(Click to select)AddLessextra shift costs
Total contribution margin	$

3(c)	Should the company add the new shift?
	No Yes

4(a)	Suppose that the company determines that it can increase Product G's maximum sales to 880 units per month by spending $2,100 per month in marketing efforts, how many units of Product G and Product B should it produce? (Leave no cells blank - be certain to enter "0" wherever required.)

Product G		units
Product B		units

4(b)	How much total contribution margin would this mix produce each month? (Leave no cells blank - be certain to enter "0" wherever required. Amounts to be deducted should be indicated with a minus sign. Omit the "$" sign in your response.)

Product G	$
Product B
(Click to select)LessAddextra shift costs
(Click to select)AddLessextra marketing costs
Total contribution margin	$

4(c)	Should the company pursue this strategy and the double shift?
	No Yes

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