Rosehill Co. manufactures two types of toilet paper: Ultra-strong and Ultra-soft. Because of a recent shortage of chlorine-based bleach, a key ingredient needed for the two products, the company has to decide the optimal amount of each product to produce. Information related to the two products that use chlorine-based bleach are shown below: Ultra-strongUltra-softSelling price per case$100$96Variable cost per case$40$44Chlorine-based bleach required per case (in liters)108Maximum monthly demand (in cases)500700 Assume that Rosehill Co. only has 7,200 liters of Chlorine-based bleach available next month. To maximize the company’s contribution margin next month, how many cases of Ultra-strong and how many cases of Ultra-soft the company should produce? Multiple Choicea)300 cases of Ultra-strong and 400 cases of Ultra-softb)500 cases of Ultra-strong and 275 cases of Ultra-softc)500 cases of Ultra-strong and 700 cases of Ultra-softd)160 cases of Ultra-strong and 700 cases of Ultra-soft

1. Calculation of Contribution Per Unit CALCULATION PARTICULAR ULTRA STRONG ULTRA SOFT…

Answered: Rosehill Co. manufactures two types of…

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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Rosehill Co. manufactures two types of toilet paper: Ultra-strong and Ultra-soft. Because of a recent shortage of chlorine-based bleach, a key ingredient needed for the two products, the company has to decide the optimal amount of each product to produce. Information related to the two products that use chlorine-based bleach are shown below:

	Ultra-strong	Ultra-soft
Selling price per case	$100	$96
Variable cost per case	$40	$44
Chlorine-based bleach required per case (in liters)	10	8
Maximum monthly demand (in cases)	500	700

Assume that Rosehill Co. only has 7,200 liters of Chlorine-based bleach available next month. To maximize the company’s contribution margin next month, how many cases of Ultra-strong and how many cases of Ultra-soft the company should produce?

Multiple Choice

a)300 cases of Ultra-strong and 400 cases of Ultra-soft

b)500 cases of Ultra-strong and 275 cases of Ultra-soft

c)500 cases of Ultra-strong and 700 cases of Ultra-soft

d)160 cases of Ultra-strong and 700 cases of Ultra-soft

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