Question
Anne Sugar makes large ceramic pots for use in outdoor landscaping. She currently has two models, one square and the other round. Because of the
Anne Sugar makes large ceramic pots for use in outdoor landscaping. She currently has two models, one square and the other round. Because of the size of Annes creations, only one pot can be fired in the kiln at a time. Information about each model follows:
Square | Round | ||||
Sales price | $70 | $90 | |||
Variable cost | $15 | $20 | |||
Firing time | 2.5 | hours | 3.5 | hours | |
Suppose that Anne has developed a rectangular, medium-size ceramic pot. It requires four hours of kiln time; however, two medium-size pots can fit in the kiln at once. The medium-size pots would sell for $60 each and have variable cost of $10 per pot. If Anne has only 40 hours of firing time available per week, what is the maximum amount of contribution margin she can earn per week?
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