Hard Candy | Chocolate Candy | TOTAL | |
Selling price per batch | $9 | $7.50 | |
Variable costs per batch | $3 | $2.50 | |
Contribution per batch | $6 | $5 | |
Time to produce one batch | 2 hours | 1 hour | |
Contribution per hour | $3 | $5 | |
Priority for allocation of hrs based on Contribution per hour | Second | First | |
Allocation of Hours |
200 hrs (bal. figure) |
400 hrs for 400 batches | 600 hours |
No. of batches | 100 batches | 400 batches |
1. Maximum profit which the company can make by producing 400 batches of chocolate candy and 100 batches of hard candy are:
= (400 * 5) + (100 * 6)
= $ 2600
2. Number of batches of Chocolate candy = 400 batches
Number of batches of hard candy = 100 batches
Product Mix with Limited Resources: Chocolate Extreme sells both hard candy and chocolate candy. It currently...
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