Answered: Anne Sugar makes large ceramic pots for…

Essentials of Business Analytics (MindTap Course List)

2nd Edition

ISBN:9781305627734

Author:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson

Publisher:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson

Chapter13: Nonlinear Optimization Models

Section: Chapter Questions

Problem 8P: Andalus Furniture Company has two manufacturing plants, one at Aynor and another at Spartanburg. The...

See similar textbooks

Related questions

Question

Anne Sugar makes large ceramic pots for use in outdoor landscaping. She currently has two models, one square and the other round. Because of the size of Anne’s creations, only one pot can be fired in the kiln at a time. Information about each model follows:

	Square	Round
Sales price	$74		$96
Variable cost	$29		$40
Firing time	2.5	hours	3.5	hours

Assume that Anne can sell as many pots as she can create but that she is limited as to the number of hours that the kiln can be run.

Compute the contribution margin per unit and contribution margin per hour of firing time.

	Square Ceramic Pot	Round Ceramic Pot
Contribution Margin per Unit
Contribution Margin per Hour

Which type of pot should Anne produce to maximize her short-term profit?

Square Ceramic Pot
Round Ceramic Pot
Both

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 3 steps with 2 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions