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Homer Simpson Company produces three types of donuts, Giant, Humungous and Death by Donut, that are in high demand.Following is information for each of these
Homer Simpson Company produces three types of donuts, Giant, Humungous and Death by Donut, that are in high demand.Following is information for each of these products:
Giant
Humungous
Death by Donut
Selling price per item
$16.75
$18.50
$25.60
Variable cost per item
14.00
13.50
19.20
Contribution margin per item
$2.75
$5.00
$6.40
Machine hours per item
1.25
.75
1.5
Orders
800
600
700
Homer has a resource constraint of 2,000 machine hours available each month.Demand for each type of donut exceeds Homer's capacity to produce the item.
- In order to maximize the company's total contribution margin, in what sequence should Homer fill orders?
- How many of each should she produce?
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