Answered step by step
Verified Expert Solution
Question
1 Approved Answer
A doughnut shop makes three basic types of doughnuts: cream filled, chocolate filled, and jam filled. The doughnut shop manager is analyzing the product mix
A doughnut shop makes three basic types of doughnuts: cream filled, chocolate filled, and jam filled. The doughnut shop manager is analyzing the product mix and has collected the following information: Chocolate Cream Jam Filled Filled Filled Sales price $ 4.00 $ 3.00 $ 2.50 per dozen Direct cost (2.10) 0.90) (2.00) per dozen (0.40) (0.50) (1.00) Fixed overhead per dozen Profit per 1.50 1.60 (0.50) dozen The fixed costs are unavoidable and are allocated to each doughnut type based on the quantity produced. The doughnut shop has excess capacity Requirea: 1-a.Calculate the contribution margin per dozen for each doughnut. (Round your answers to 2 decimal places.) Chocolate Cream Jam Filled Filled Filled Contribution margin er dozern 1-b.Which product should the doughnut shop promote if the promotion will result in an increase in sales of 50 dozen of the promoted product? Cream filled Chocolate filled Jam filled 2-a.Should the jam-filled doughnuts be dropped from the product line? O Yes No
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started