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contribution margin As an example, WhipSnip needs to provide 15,000 gas trimmers to the retail chain, and WhipSnip will earn a contribution margin of
"contribution margin As an example, WhipSnip needs to provide 15,000 gas trimmers to the retail chain, and WhipSnip will earn a contribution margin of $77 per gas trimmer that they make and they will earn a contribution margin of $65 per gas trimmer that they buy from their affiliate and resell to the retail chain. If all the hours available in the Engine department were to be used for electric trimmers, then how many electric trimmers could be processed in that department? Ignore the contracts and the hours available in the other two departments. for consistency, 1 pt. for optimality) How many electric and gas trimmers should WhipSnip make, and how many should they buy from their affiliate in order to maximize the total contribution margin while fulfilling the contracts? Also, report the number of hours used in each department and the total contribution margin. The labour availability of 10,000 hours for the next month in the Engine department assumes no overtime. For this part, assume that there is no limit on how much overtime the employees in the Engine department can work and that they are paid an extra $20 per hour of overtime. Overtime is not allowed in the other departments. The regular (non-overtime) wage is already factored into the contribution margins. Given these assumptions, report the optimal number of overtime hours to use next month and the total contribution margin. Department Engine Assembly Packaging Contribution margin when produced $ Contribution margin when bought $ Contracted amount Hours required/trimmer Gas Electric Hours available 0.25 0.40 10,000 0.30 0.50 15,000 0.15 0.10 5,000 Type of trimmer Gas Electric 77.00 $ 105.00 65.00 $ 95.00 15,000 30,000
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