Question
Constraint on the amount of cocoa We have enough cocoa supply to produce our top selling winter seasonal collection items but not our full winter
Constraint on the amount of cocoa
We have enough cocoa supply to produce our top selling winter seasonal collection items but not our full winter seasonal collection line. Let me explain our production process. We first make a batch of chocolate. We spent $50,000 last year to produce our entire chocolate batch. The batch of chocolate can then be shaped and sold as is."
Chocolate Santas
We sell each 250 gram (g) chocolate Santa for $2.50. During 2022, we sold 12,000 chocolate Santas.
To produce 1 unit of chocolate bark, 1 package of marshmallow snowmen, or 1 bag of chocolate covered pretzels, 250g of chocolate can be used.
Chocolate Bark
We sell275gofchocolatebarkfor$8.50.Theadditionalprocessingcostswere$57,800.During 2022, we sold 2,598,750g of chocolatebark.
Marshmallow Snowmen
We sell a 4-pack of marshmallow snowmen for $6.00. The additional processing costs were
14,000. During 2022, we sold 21,600 marshmallow snowmen.
Chocolate Pretzels
We sell a 450g bag of chocolate covered pretzels for $5.50. The additional processing costs were $11,000. During 2022, GCI sold 1,640,250g of chocolate covered pretzels.
Calculate contribution margin for each product
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