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gregori [183]
3 years ago
9

Waterway Industries can produce and sell only one of the following two products: Oven Contribution Hours Required Margin Per Uni

t Muffins 0.2 $4 Coffee Cakes 0.3 $5 The company has oven capacity of 1500 hours. How much will contribution margin be if it produces only the most profitable product
Business
1 answer:
miv72 [106K]3 years ago
4 0

Answer:

$30,000

Explanation:

                                             Muffins      Coffee Cakes

Contribution Per Unit (A)        $4                   $5

Oven Hours Required (B)      0.2                   0.3

Contribution Per Hour         $20                $16.67

Rank                                          1                        2

Total Hours Available                                                       1,500

Hours Required for 1 Unit of Muffin                                 <u>  0.2  </u>

Total Muffins Production with 1500 Hours (1,500/.2)     7,500

Contribution Per Unit                                                       <u>   $4     </u>

Total Contribution (7,500*$4)                                      <u>$30,000</u>

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