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One of Lisa's favorite things in the whole world is her grandma's banana bread. Lisa has become so obsessed with this bread that she's using
One of Lisa's favorite things in the whole world is her grandma's banana bread. Lisa has become so obsessed with this bread that she's
using her grandma's recipe and making it for her friends. She and her friends have tweaked the recipe so that they can make delicious
banana chocolate chip muffins and banana squares, too. They've turned this into a side business, selling their items to local
convenience stores.
There's one problem: the baked goods are best when wellripened bananas are used. They're often available at a reduced price. But
when they're not, Lisa has to buy green bananas at full price and wait for them ripen.
Here are the typical costs and selling prices for each product.
a
Lisa would love to bake these items seven days a week, but availability of ripe bananas is a constraint. The following quantities of
ripe bananas are required for each of the products Lisa makes: banana bread requires pounds, muffins require pound,
and squares require pounds. How much is the contribution margin per pound? Round answers to decimal places, eg
Which product maximizes her profitability, given the constrained resource?
maximizes her profitability.
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