Question

6 - 16 Test Bank for Managerial Accounting, Seventh Edition 79. Greg's Breads can produce and sell only one of the following two products: Oven Contribution Hours Required Margin Per Uns Muffins 0.2 Coffee Cakes 0.3 The company has oven capacity of 1,500 hours. How much will contribution margin be if it produces only the most profitable product? a $15,000 b. $20,000 C $22.500 d. $30,000 am 10 pontosan n 2. Monte AOPA R aty Sadar Perspective, NCPAIN Suurement OPARO

Answer 1

You have asked two different questions but we are supposed to answer only one.. so I am answering the first one

79.

Calculation of contribution per oven hour

= Contribution per unit / hours per unit

Muffins = $3/0.2 hours = $15

Coffee cakes = $4/0.3 hours = $13.33

Since contribution per hour is more in muffin we will only produce that.

So muffins produced = 1500 hours / 0.2 hour per unit = 7500 muffins

Contribution = 7500*$3 per muffin = $22500

Answer option C.

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