Because of your love of condiments (especially on a hot dog!), you have been following the happenings at the local bottling plant. Last week, a newspaper article mentioned slowdowns there due to operational issues, which was intriguing since it's a topic you're studying at school right now. Lucky for you, one of the plant managers was already planning a visit to your classroom. As he spoke, he began with a puzzle for your class to solve: "We bottle three primary products in our plant: ketchup, mustard, and relish. Our operations manager has always put priority on our highest contribution margin product. That makes sense, right? But a few months ago, we went 'old school' for our ketchup and started bottling it in classic tall, slender glass bottles. Our customers actually enjoy having to give the bottle a whack to get the product flowing. Since that switch, though, our production department can't seem to meet the budget." The plant manager then showed the class the following information. Ketchup Mustard Relish Current priority based on CM per unit #1 #3 #2 Bottling time (hours per unit) 0.01 0.005 0.02 Variable cost per unit $1.00 $0.70 $0.95 Monthly demand (units) 40,000 25,000 10,000 The plant manager then said: "The puzzle: I'm not sure if we are maximizing the profitability of our bottling capacity anymore. What do you think?" (b) Assume that after the switch to glass bottles, the following cost relationship exists for all three products: variable costs are 25% of selling price. Given this information, what must be the current contribution margin per unit for each of the three products? Further, in what order should the company now rank its products in terms of profitability if the bottling activity is its primary constraint? (Round answers to 2 decimal places, e.g. 15.25.) Contribution margin/bottling hour New priority rank eTextbook and Media Save for Later Ketchup Mustard Relish Attempts: 0 of 5 used Submit