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Lovejoy's Cake Shop makes three types of cakes, White, Chocolate and Swirl on one assembly line. The assembly line is limited to 400 labor hours
Lovejoy's Cake Shop makes three types of cakes, White, Chocolate and Swirl on one assembly line. The assembly line is limited to 400 labor hours per week. Lovejoy can sell
all of the cakes it can make under current operating capacity. Manufacturing information per
cake for each product is as follows:
White Chocolate Swirl
Selling price : $16 $10 $20
Variable cost : $10 $5 $18
Labor-hours per cake : 0.4 0.2 0.4
Which of the three products should Lovejoy's make? How much will the total contribution
margin be if these cakes are made?
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