Wildlife Foods prepares wild birdseed mixes and sells them to local pet stores, grocery stores, and wild
Question:
Wildlife Foods prepares wild birdseed mixes and sells them to local pet stores, grocery stores, and wild bird stores. Two types of mixes have been most successful: Flight Fancy and Multigrain. Flight Fancy generates a contribution margin of $12 per 100 pound bag and Multigrain contributes $9 per 100 pounds. Because Wildlife Foods has been very thorough in its sterilization process, the birdseed never germinates and grows.
Therefore, it is a top seller and the company can sell all of the birdseed it produces.
The seed is processed in three stages: mixing, sterilization, and packaging. The time requirements for each batch of 100 bags of Flight Fancy and 10,000 pounds of Multigrain (which is sold in bulk rather than bags) follow.
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REQUIRED
A. Using a spreadsheet program such as Excel Solver, find the optimal product mix given the current constraints and contribution margins.
B. Which constraints are binding?
C. Develop an answer by graphing the solution area.
D. What happens if minutes available for mixing are doubled? Does another constraint become binding? What is the optimal product mixnow?
Contribution MarginContribution margin is an important element of cost volume profit analysis that managers carry out to assess the maximum number of units that are required to be at the breakeven point. Contribution margin is the profit before fixed cost and taxes...
Step by Step Answer:
Contribution Margin per Batch of Product Flight Fancy 12 per 100pound bag 100 bags per batch 1200 pe...View the full answer
Cost Management Measuring Monitoring and Motivating Performance
ISBN: 978-0470769423
2nd edition
Authors: Leslie G. Eldenburg, Susan K. Wolcott
