Question
Pharoah Mountain Bakery makes doughnuts, cupcakes, and scones that are in high demand by local restaurants and hotels. Following is information for each of these
Pharoah Mountain Bakery makes doughnuts, cupcakes, and scones that are in high demand by local restaurants and hotels. Following is information for each of these products:
Doughnuts | Cupcakes | Scones | ||||
Selling price per item | $2.00 | $2.50 | $2.31 | |||
Variable cost per item | 1.80 | 2.40 | 1.01 | |||
Contribution margin per item | $0.20 | $0.10 | $1.30 | |||
Machine hours per item | 0.10 | 0.14 | 0.20 |
Pharoah Mountain has 2600 machine hours available each month. Demand for each item exceeds Pharoah Mountain's capacity to produce the item. In order to maximize the company's total contribution margin, in what sequence should Pharoah Mountain fill orders for the three products?
A) Scones first, then doughnuts, then cupcakes
B) Cupcakes first, then doughnuts, then scones
C) Doughnuts first, then scones, then cupcakes
D) Scones first, then cupcakes, then doughnuts
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started