Charlie Fyffe of Charlie's Brownies makes brownies and other sweets. Charlie must decide on the best sales

Question:

Charlie Fyffe of Charlie's Brownies makes brownies and other sweets. Charlie must decide on the best sales mix for his products. Assume that his company has a capacity of 400 hours of processing time available each month and it makes two types of brownies, Deluxe and Premium. Information on these foods follows.

Required
1. Assume the markets for both cartons of brownies are unlimited. How many Deluxe cartons and how many Premium cartons should the company make each month? Explain. How much total contribution margin does this mix produce each month?
2. Assume the market for the Deluxe carton is limited to 60 cartons per month, with no market limit for the Premium cartons. How many Deluxe cartons and how many Premium cartons should the company make each month? Explain. How much total contribution margin does this mix produce each month?

Contribution Margin
Contribution 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...