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Exercise 10-9: Sales mix determination and analysis L.O. C1, A1
Colt Company owns a machine that can produce two specialized products. Production time for Product TLX is
two units per hour and for Product MTV is five units per hour. The machine's capacity is 2,750 hours per year.
Both products are sold to a single customer who has agreed to buy all of the company's output up to a
maximum of 4,700 units of Product TLX and 2,500 units of Product MTV. Selling prices and variable costs per
unit to produce the products follow.

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Solution Summary

This solution contains step-by-step calculations to determine the sales mix, number of unit, and contribution margin.

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Contribution Margin = Selling Price - Variable Cost

Contribution Margins:

TLX = $10.20 per unit
MTV = $4.00

No of Units per Machine ...

Solution provided by:
Gaurav Agarwal, MS
Education
  • BE, Bangalore University, India
  • MS, University of Wisconsin-Madison
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