Mallory Manufacturing produces thermal tents and sleeping bags. The company’s products are in high demand due to the quality and durability of the products. Mallory estimates it could sell 600 tents per month and 600 sleeping bags per month. Following is information for each of these products: Tent Sleeping Bag Selling price per item $68 $43 Variable cost per item 49.5 29 Contribution margin per item $18.5 $14 Machine hours per item 1.1 0.8 Mallory has 800 machine hours available each month. If Mallory allocates its production capacity between the tents and sleeping bags so that it maximizes the company’s contribution margin, what will the contribution margin be?
Unitary Method
The word “unitary” comes from the word “unit”, which means a single and complete entity. In this method, we find the value of a unit product from the given number of products, and then we solve for the other number of products.
Speed, Time, and Distance
Imagine you and 3 of your friends are planning to go to the playground at 6 in the evening. Your house is one mile away from the playground and one of your friends named Jim must start at 5 pm to reach the playground by walk. The other two friends are 3 miles away.
Profit and Loss
The amount earned or lost on the sale of one or more items is referred to as the profit or loss on that item.
Units and Measurements
Measurements and comparisons are the foundation of science and engineering. We, therefore, need rules that tell us how things are measured and compared. For these measurements and comparisons, we perform certain experiments, and we will need the experiments to set up the devices.
|
Tent
|
Sleeping Bag
|
|||
|---|---|---|---|---|
|
Selling price per item
|
$68 | $43 | ||
|
Variable cost per item
|
49.5 | 29 | ||
|
Contribution margin per item
|
$18.5
|
$14
|
||
|
Machine hours per item
|
1.1 | 0.8 |
Mallory has 800 machine hours available each month. If Mallory allocates its production capacity between the tents and sleeping bags so that it maximizes the company’s contribution margin, what will the contribution margin be?
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 1 images
