One of Ruth's favorite things in the whole world is her grandma's banana bread. Ruth has...
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One of Ruth's favorite things in the whole world is her grandma's banana bread. Ruth has become so obsessed with this bread that she's using her grandma's recipe and making it for her friends. She and her friends have tweaked the recipe so that they can make delicious banana chocolate chip muffins and banana squares, too. They've turned this into a side business, selling their items to local convenience stores. There's one problem: the baked goods are best when well-ripened bananas are used. They're often available at a reduced price. But when they're not, Ruth has to buy green bananas at full price and wait for them ripen. Here are the typical costs and selling prices for each product. Selling price Variable costs Bread (per loaf) $4.40 2.10 Muffin (per dozen) $5.50 2.50 Squares (per dozen) $4.20 1,60 4 (a) Your Answer Correct Answer Ruth would love to bake these items seven days a week, but availability of ripe bananas is a constraint. The following quantities of ripe bananas are required for each of the products Ruth makes: banana bread requires 1.25 pounds, muffins require 1.00 pound, and squares require 0.75 pounds. How much is the contribution margin per pound? (Round answers to 2 decimal places, e.g. 15.25.) Contribution margin per pound Bread Which product maximizes her profitability, given the constrained resource? maximize(s) her profitability. Muffins $ Squares (b) The local convenience stores have told Ruth that they can sell as many loaves of banana bread as she can supply, but they can only sell a combined 20 dozen muffins and squares. In a given production period, if Ruth has 25 pounds of ripened bananas to work with, what quantities of each product should she make in order to maximize her profitability? (If no unit of an item is to be produced enter O. Do not leave any field blank.) Quantity Bread loaves Muffins dozen Squares sumum himnuto dozen (c) Calculate Ruth's total contribution margin if she produces and sells at the quantities specified in part (b). (Round answer to 2 decimal places, eg. 15.25.) Total contribution margin $ One of Ruth's favorite things in the whole world is her grandma's banana bread. Ruth has become so obsessed with this bread that she's using her grandma's recipe and making it for her friends. She and her friends have tweaked the recipe so that they can make delicious banana chocolate chip muffins and banana squares, too. They've turned this into a side business, selling their items to local convenience stores. There's one problem: the baked goods are best when well-ripened bananas are used. They're often available at a reduced price. But when they're not, Ruth has to buy green bananas at full price and wait for them ripen. Here are the typical costs and selling prices for each product. Selling price Variable costs Bread (per loaf) $4.40 2.10 Muffin (per dozen) $5.50 2.50 Squares (per dozen) $4.20 1,60 4 (a) Your Answer Correct Answer Ruth would love to bake these items seven days a week, but availability of ripe bananas is a constraint. The following quantities of ripe bananas are required for each of the products Ruth makes: banana bread requires 1.25 pounds, muffins require 1.00 pound, and squares require 0.75 pounds. How much is the contribution margin per pound? (Round answers to 2 decimal places, e.g. 15.25.) Contribution margin per pound Bread Which product maximizes her profitability, given the constrained resource? maximize(s) her profitability. Muffins $ Squares (b) The local convenience stores have told Ruth that they can sell as many loaves of banana bread as she can supply, but they can only sell a combined 20 dozen muffins and squares. In a given production period, if Ruth has 25 pounds of ripened bananas to work with, what quantities of each product should she make in order to maximize her profitability? (If no unit of an item is to be produced enter O. Do not leave any field blank.) Quantity Bread loaves Muffins dozen Squares sumum himnuto dozen (c) Calculate Ruth's total contribution margin if she produces and sells at the quantities specified in part (b). (Round answer to 2 decimal places, eg. 15.25.) Total contribution margin $
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Step 12 Contribution Margin per pound Working Notes Selling price per unit Less variable cost ... View the full answer
Related Book For
Foundations of Financial Management
ISBN: 978-1259024979
10th Canadian edition
Authors: Stanley Block, Geoffrey Hirt, Bartley Danielsen, Doug Short, Michael Perretta
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