Wondrous Aromas Company has three lines of perfume: Red, Green, and Blue. After

megacelebrity Caitlyn Spencer tweeted that this was her favourite line of perfume, demand for

all three products has been off the charts. The company has a problem, it has a limited supply of

orchid nectar, a common ingredient in all three products. Orchid nectar costs $5 per gram and is

the major selling feature of all three perfumes. Cost data follow:

RED($) GREEN($) BLUE($)

Price 200 160 80

Variable expense

Orchid neter 50 30 20

Other direct material 15 25 15

Direct material 20 25 10

Variable manufacturing overheaad 15 10 10

Total variable cost 100 90 55 Contribution margin 100 70 25

Wondrous Aromas Company has three lines of perfume: Red, Green, and Blue. After

megacelebrity Caitlyn Spencer tweeted that this was her favourite line of perfume, demand for

all three products has been off the charts. The company has a problem, it has a limited supply of

orchid nectar, a common ingredient in all three products. Orchid nectar costs $5 per gram and is

the major selling feature of all three perfumes. Cost data follow: