Question
Ladco Inc. produces 2 products, Pots and Pans. The selling price for Pots is $80 per unit and for Pans it is $70 per unit.
Ladco Inc. produces 2 products, Pots and Pans. The selling price for Pots is $80 per unit and for Pans it is $70 per unit. Variable costs for Pots is $56 and for Pans it is $55 per unit respectively. It takes 1.00 minute of machine time to make 1 pot and it only takes 0.50 (half) a minute to make a Pan. Ladco has orders to make 3,000 pots and 3,500 pans but the machine that makes these products can only be used for 2,500 minutes. You must show all calculation for requirements a, b and c. (a) Calculate the contribution margin per unit for both Pots and Pans. (b) Calculate the contribution margin per minute of machine use for both Pots and Pans. (c) How many units of Pots and how many units of Pans need to be made in order to maximize contribution margin
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