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, onlyone pot can be fired in the kiln at a time. Information about each model follows:Square$80$20Round$118$41Sales priceVariable costFiring time2.5 hours3.5 hoursAssume 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 CeramicPotRoundCeramic PotContribution Margin per UnitContribution Margin per Hour

Question
Asked Oct 21, 2019

how would i find the contribution margins for the two pots

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
$80
$20
Round
$118
$41
Sales price
Variable cost
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
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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 $80 $20 Round $118 $41 Sales price Variable cost 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

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check_circleExpert Solution
Step 1
Compute the Contrubution margin per unit
Square
Ceramic pot Ceramic Pot
Round
Particulars
Selling price
$80
$118
$41
Variable cost
$20
Contribution margin per unit
$77
$60
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Compute the Contrubution margin per unit Square Ceramic pot Ceramic Pot Round Particulars Selling price $80 $118 $41 Variable cost $20 Contribution margin per unit $77 $60

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Step 2
Compute the contribution margin per hour of firing time
Square
Ceramic pot Ceramic Pot
Round
Particulars
Selling price
$80
$118
$41
Variable cost
$20
$60
Contribution margin per unit (U)
Firing time in hours per unit (F)
Contribution margin per hour (H)
$77
2.5
3.5
(U) (F)
$22
$24
help_outline

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Compute the contribution margin per hour of firing time Square Ceramic pot Ceramic Pot Round Particulars Selling price $80 $118 $41 Variable cost $20 $60 Contribution margin per unit (U) Firing time in hours per unit (F) Contribution margin per hour (H) $77 2.5 3.5 (U) (F) $22 $24

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