Cramden Company produces two types of candles: pillars and tapers, which use the same type of direct material, high-quality beeswax with few suppliers. Tapers use two pounds of beeswax for every candle produced and pillars use five pounds. Tapers have a unit contribution margin of $30 each, and pillars have a unit contribution margin of $60 each. Currently, Cramden has 16,000 pounds of beeswax in inventory. According to the marketing department, the maximum numbers of candles that Cramden can sell each month are 2,000 tapers and 4,000 pillars. Cramden has received word that the vendor who provides the beeswax is on strike, and Cramden is not aware of an alternate source of the beeswax. What is the maximum contribution margin (in dollars) that Cramden can earn this month (if Cramden's supplier does not settle its strike)

Answer rating: 100% (QA)

Maximum Contribution Margin Calculation To maximize their contribution marginCramden needs to decide ... View the full answer