Answered step by step
Verified Expert Solution
Question
1 Approved Answer
XYZ Co. manufactures two types of toilet paper: ultra-strong and ultra-soft. Because of a recent shortage of chlorine- based bleach, a key ingredient needed for
XYZ Co. manufactures two types of toilet paper: ultra-strong and ultra-soft. Because of a recent shortage of chlorine- based bleach, a key ingredient needed for the two products, the company has to decide what amount of each product would be most advantageous to produce. Information related to the two products that use chlorine-based bleach are shown below: Ultra-strong | Ultra-soft $25 $28 50% 70% Contribution margin per case Contribution margin ratio Chlorine-based bleach required per case (in liters) Maximum monthly demand (in cases) 5 unlimited L 7 unlimited Assume that XYZ Co. only has 3,500 liters of Chlorine-based bleach available next month. What is the maximum amount of contribution margin that the company can generate next month from the two products above given the shortage of Chlorine-based bleach? o A. $14,000 O B. $19,250 O C.$15,750 OD.$17,500
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