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Sweet Taste has the capacity to produce either 45-000 corncob pipes or.pdf

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Sweet Taste can produce either 45,000 corncob pipes or 23,000 cornhusk dolls per year. Pipes cost $5 to produce and sell for $11.50, giving a contribution margin of $6.50 per pipe. Dolls cost $6 to produce and sell for $14, giving a contribution margin of $8 per doll. Sweet Taste should produce the cornhusk dolls because they have a higher contribution margin per unit and will therefore generate a higher total contribution margin.

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Sweet Taste has the capacity to produce either 45,000 corncob pipes or 23,000 cornhusk dolls per year. The pipes cost $5 , 00 each to produce and sell for $11.50 each. The dolls sell for $14.00 each and cost $6.00 to produce. Required Calculate the contribution margin per unit and the total contribution margin for Pipes and Dolls. Assuming that Sweet Taste can sell all it produces of either product, should it produce the corncob pipes or the cornhusk dolls? Note: Round "Contribution margin per unit" answers to 2 decimal places.

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Sweet Taste has the capacity to produce either 45-000 corncob pipes or.pdf

  • 1. Sweet Taste has the capacity to produce either 45,000 corncob pipes or 23,000 cornhusk dolls per year. The pipes cost $5 , 00 each to produce and sell for $11.50 each. The dolls sell for $14.00 each and cost $6.00 to produce. Required Calculate the contribution margin per unit and the total contribution margin for Pipes and Dolls. Assuming that Sweet Taste can sell all it produces of either product, should it produce the corncob pipes or the cornhusk dolls? Note: Round "Contribution margin per unit" answers to 2 decimal places.