西方管理会计学ManagerialAccounting10.pptVIP

* Fixed costs are usually unaffected in these situations, so the product mix that maximizes the company’s total contribution margin ordinarily should be selected. ? A company should not necessarily promote those products that have the highest unit contribution margin. Rather, total contribution margin will be maximized by promoting those products or accepting those orders that provide the highest contribution margin in relation to the constrained resource. * Assume that Ensign Company produces two products and selected data are as shown on this slide. * In addition, assume that: Machine A1 is the constraint; There is excess capacity on all other machines; and Machine A1 has a capacity of 2,400 minutes per week. Should Ensign focus its efforts on product 1 or 2? * How many units of each product can be processed through Machine A1 in one minute? * What generates more profit for the company, using one minute of machine A1 to process Product 1 or using one minute of machine A1 to process Product 2? * As suggested by the answer to the Quick Check question, Ensign should emphasize product 2 because it generates a contribution margin of $30 per minute of the constrained resource relative to $24 per minute for product 1. * Ensign can maximize its contribution margin by first producing product 2 to meet customer demand and then using any remaining capacity to produce product 1. The calculations would be performed as shown on the following slide. * The calculations would be performed as follows. ? Satisfying the weekly demand of 2,200 hundred units for product 2 would consume 1,100 minutes of available capacity on machine A1. * This implies that 1,300 constrained minutes would still be available to satisfy demand for product 1. * Since each unit of product 1 requires one minute of A1 machine time, Ensign could produce 1,300 units of product 1 with its remaining capacity. * This mix of production, 2,200 units of product 2 and 1,300 units of product 1, would y