Sensational Soft Drinks makes three products: iced tea, soda, and lemonade. The following data are available: Iced Tea Soda Lemonade Sales price per unit $0.90 $0.60 $0.50 Variable cost per unit 0.30 0.15 0.10 Contribution margin per unit $0.60 $0.45 $0.40 Sensational is experiencing a bottleneck in one of its processes that affects each product as follows: Iced Tea Soda Lemonade Bottleneck process hours per unit 3 3 4 (a) Using a theory of constraints (TOC) approach, rank the products in terms of profitability. (b) What price for lemonade would equate its profitability (contribution margin per bottleneck hour) to that of soda
Sensational Soft Drinks makes three products: iced tea, soda, and lemonade. The following data are available: Iced Tea Soda Lemonade Sales price per unit $0.90 $0.60 $0.50 Variable cost per unit 0.30 0.15 0.10 Contribution margin per unit $0.60 $0.45 $0.40 Sensational is experiencing a bottleneck in one of its processes that affects each product as follows: Iced Tea Soda Lemonade Bottleneck process hours per unit 3 3 4 (a) Using a theory of constraints (TOC) approach, rank the products in terms of profitability. (b) What price for lemonade would equate its profitability (contribution margin per bottleneck hour) to that of soda
Chapter3: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 7PA: Manatoah Manufacturing produces 3 models of window air conditioners: model 101, model 201, and model...
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Sensational Soft Drinks makes three products: iced tea, soda, and lemonade. The following data are available: Iced Tea Soda Lemonade Sales price per unit $0.90 $0.60 $0.50 Variable cost per unit 0.30 0.15 0.10 Contribution margin per unit $0.60 $0.45 $0.40 Sensational is experiencing a bottleneck in one of its processes that affects each product as follows: Iced Tea Soda Lemonade Bottleneck process hours per unit 3 3 4 (a) Using a theory of constraints (TOC) approach, rank the products in terms of profitability. (b) What price for lemonade would equate its profitability (contribution margin per bottleneck hour) to that of soda
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