Sunland Company produces earrings, bracelets, and necklaces that are in high demand. Following is information for each of these products: Earrings Bracelets Necklaces Selling price per item $17.15 $22.50 $29.60 Variable cost per item 14.35 18.50 24.50 Contribution margin per item $2.80 $4.00 $5.10 Machine hours per item 0.50 1.00 1.20 Sunland has 2000 machine hours available each month. Demand for each item exceeds Sienna’s capacity to produce the item. In order to maximize the company’s total contribution margin, in what sequence should Sunland fill orders for the three products? Necklaces first, then earrings, then bracelets. Bracelets first, then earrings, then necklaces. Earrings first, then necklaces, then bracelets. Necklaces first, then bracelets, then earrings.
Sunland Company produces earrings, bracelets, and necklaces that are in high demand. Following is information for each of these products: Earrings Bracelets Necklaces Selling price per item $17.15 $22.50 $29.60 Variable cost per item 14.35 18.50 24.50 Contribution margin per item $2.80 $4.00 $5.10 Machine hours per item 0.50 1.00 1.20 Sunland has 2000 machine hours available each month. Demand for each item exceeds Sienna’s capacity to produce the item. In order to maximize the company’s total contribution margin, in what sequence should Sunland fill orders for the three products? Necklaces first, then earrings, then bracelets. Bracelets first, then earrings, then necklaces. Earrings first, then necklaces, then bracelets. Necklaces first, then bracelets, then earrings.
Chapter18: The Management Of Accounts Receivable And Inventories
Section: Chapter Questions
Problem 16P
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Sunland Company produces earrings, bracelets, and necklaces that are in high demand. Following is information for each of these products:
|
Earrings
|
Bracelets
|
Necklaces
|
|
|---|---|---|---|
|
Selling price per item
|
$17.15 | $22.50 | $29.60 |
|
Variable cost per item
|
14.35 | 18.50 | 24.50 |
|
Contribution margin per item
|
$2.80
|
$4.00
|
$5.10
|
|
Machine hours per item
|
0.50 | 1.00 | 1.20 |
Sunland has 2000 machine hours available each month. Demand for each item exceeds Sienna’s capacity to produce the item. In order to maximize the company’s total contribution margin, in what sequence should Sunland fill orders for the three products?
Necklaces first, then earrings, then bracelets.
Bracelets first, then earrings, then necklaces.
Earrings first, then necklaces, then bracelets.
Necklaces first, then bracelets, then earrings.
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