Polar Company Produces Two Types of Gears,Simple Gears and Deluxe

question 69

Essay

Polar Company produces two types of gears,Simple Gears and Deluxe Gears,with unit contribution margins of $2 and $5,respectively.Each gear must spend time on a special machine.The firm owns 10 machines that together provide 25,000 hours of machine time per year.Each Simple Gear requires 0.10 hours of machine time; each Deluxe Gear requires 0.4 hours of machine time. A. What is the contribution margin per hour of machine time for each Simple Gear? And for each Deluxe Gear?
If Polar faces only the production constraint (25,000 hours of machine time), how many
B. units of Simple Gears should be produced? And how many units of Deluxe Gears? What is the total contribution margin from this product mix?
Now suppose that Polar cannot sell more than 200,000 units of each type of gear. How
C. many units of Simple Gears should be produced? And how many units of Deluxe Gears? What is the total contribution margin from this product mix?

Demonstrate knowledge of troubleshooting and customer service skills.

Recognize safety precautions necessary in computer maintenance.

Understand memory types and their uses in PCs.

Understand the concept and legal implications of deceptive pricing.

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Definitions:

Incentive Pay Plan

A compensation strategy that pays employees based on their performance or the achievement of specific business goals.

Gainsharing

A compensation strategy where employees receive benefits from improvements in the company's performance, such as increased productivity or cost savings.

Gainsharing

A performance-based compensation strategy that rewards employees for contributing to the company's success through efficiencies and improvements.

Group Incentive Plan

A compensation system designed to reward a group of employees based on the collective achievements or performance of the group.