Question
Sam's Shoes makes two types of running shoes: cross country shoes and track shoes. Cross country shoes sell for $95 per pair and have a
Sam's Shoes makes two types of running shoes: cross country shoes and track shoes. Cross country shoes sell for $95 per pair and have a contribution margin of $50. Cross country shoes also use 3 lbs. of rubber per pair of shoes. Track shoes sell for $85 per pair and have a contribution margin of $45. Track shoes use 2 lbs. of rubber per pair of shoes. Sam's Shoes is experiencing a shortage of rubber needed to make their shoes. If there is unlimited demand for their shoes, which product should Sam's Shoes focus on producing to maximize profit? Why?
- A. Focus on track shoes because they earn $22.50 per pound of rubber.
- B. Focus on track shoes because they earn $42.50 per pound of rubber.
- C. Focus on cross country shoes because they earn $31.67 per pound of rubber.
- D. Focus on cross country shoes because they earn $16.67 per pound of rubber.
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