Fifth edition Alnoor Bhimani Charles T. Horngren Srikant M. Datar Madhav V. Rajan Farah Ahamed



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solutions-manual-to-bhimani-et-al-management-and-cost-accounting-pearson-2012-1
Harpes-à-Gonds Fourbe-Riz
Revenues Variable costs Contribution margin
€120,000 42,000
€78,000
€80,000 48,000
€32,000 Contribution margin per machine-hour
€78,000 = €52 1,500
€32,000 = €64 500 Since the €80,000 of additional Fourbe-Riz business in February is identical to jobs done in January, it will also have a contribution margin of €64 per machine-hour, which is greater than the contribution margin of €52 per machine-hour from
Harpes-à-Gonds. To maximise operating income, Jours-Daim should first allocate all the capacity needed to take the Fourbe-Riz business (1,000 machine-hours) and then allocate the remaining 1,000 (2,000 − 1,000) machine-hours to Harpes-à-
Gonds. Jours-Daim’s operating income in February would then be €16,000 as shown below, greater than the €10,000 operating income in January.


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