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Felix's Fantastic Donuts has some bench space in the shop that can be used to sell drinks. However they can only sell one of these
Felix's Fantastic Donuts has some bench space in the shop that can be used to sell drinks. However they can only sell one of these products - and must evaluate which one should be sold.
Milk shakes | Bubble tea | |
Projected sales (units) | 350 | 600 |
Sales price per unit | $5.50 | $8.00 |
Direct materials per unit | $2 | $4 |
Direct labour per unit | $1 | $1 |
Packaging per unit | $1 | $1.50 |
Fixed overhead for machines | $250 | $450 |
Enter the total contribution margin for the product that the business should choose to sell.
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