Optimal product mix. (CMA adapted) Della Simpson, Inc., sells two popular brands of cookies: Della’s Delight and Bonny’s Bourbon. Della’s Delight goes through the Mixing and Baking departments, and Bonny’s Bourbon, a filled cookie, goes through the Mixing, Filling, and Baking departments. Michael Shirra, vice president for sales, believes that at the current price, Della Simpson can sell all of its daily production of Della’s Delight and Bonny’s Bourbon. Both cookies are made in batches of 3,000. In each department, the time required per batch and the total time available each day are as follows:Revenue and cost data for each type of cookie are as follows:Using D to represent the batches of Della’s Delight and B to represent the batches of Bonny’s Bourbon made and sold each day, formulate Shirra’s decision as an LP model.Compute the optimal number of batches of each type of cookie that Della Simpson, Inc., should make and sell each day to maximize operating income. HomeInsertPage LayoutFormulasDataReviewABDepartment MinutesBaking10Mixing30Filling3 Della's Delight4 Bonny's Bourbon5 Total available per day151515660270300 Page LayoutFormulasHomeInsertDataDella's Bonny'sDelight Bourbon$ 475 $ 3751759 Revenue per batch10 Variable cost per batch11 Contribution margin per batch12 Monthly fixed costs(allocated to each product)125$ 300$ 250$18,650 $22,35013

1.Write the formula for S’s decision as an LP model.

Answered: Home Insert Page Layout Formulas Data…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Optimal product mix. (CMA adapted) Della Simpson, Inc., sells two popular brands of cookies: Della’s Delight and Bonny’s Bourbon. Della’s Delight goes through the Mixing and Baking departments, and Bonny’s Bourbon, a filled cookie, goes through the Mixing, Filling, and Baking departments. Michael Shirra, vice president for sales, believes that at the current price, Della Simpson can sell all of its daily production of Della’s Delight and Bonny’s Bourbon. Both cookies are made in batches of 3,000. In each department, the time required per batch and the total time available each day are as follows:

Revenue and cost data for each type of cookie are as follows:

Using D to represent the batches of Della’s Delight and B to represent the batches of Bonny’s Bourbon made and sold each day, formulate Shirra’s decision as an LP model.
Compute the optimal number of batches of each type of cookie that Della Simpson, Inc., should make and sell each day to maximize operating income.

Home
Insert
Page Layout
Formulas
Data
Review
A
B
Department Minutes
Baking
10
Mixing
30
Filling
3 Della's Delight
4 Bonny's Bourbon
5 Total available per day
15
15
15
660
270
300

Page Layout
Formulas
Home
Insert
Data
Della's Bonny's
Delight Bourbon
$ 475 $ 375
175
9 Revenue per batch
10 Variable cost per batch
11 Contribution margin per batch
12 Monthly fixed costs
(allocated to each product)
125
$ 300
$ 250
$18,650 $22,350
13

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