Bakers Choice Manufacturing manufactures two products: Rolling Pin and Baking Tray. Contribution margin per unit...
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Accounting
Bakers Choice Manufacturing manufactures two products: Rolling Pin and Baking Tray. Contribution margin per unit is determined as follows:
Rolling Pin Baking Tray Revenue P 130 P 80 Variable Costs (70) (38) Contribution Margin P 60 P 42
Total demand for Rolling Pin is 16,000 units and for Baking Tray is 8,000 units. Machine hour is a scarce resource. 42,000 machine hours are available during the year. Rolling pin requires 6 machine hours per unit while baking tray requires 3 machine hours per unit.
Required: How many units does of rolling pin and baking tray should Bakers Choice produce to optimize profit? (Show your computations.)
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