Answered step by step
Verified Expert Solution
Link Copied!

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

image text in transcribed

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

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Energy Audit And Management Concept Methodologies Procedures And Case Studies

Authors: L. Ashok Kumar, Gokul Ganesan

1st Edition

978-1032067797

More Books

Students also viewed these Accounting questions

Question

10. What are four hypotheses about the causes of dyslexia?

Answered: 1 week ago