Healthier Living Company manufactures two productslong dashtoaster ovens and bread machines. The following data are available: Toaster Ovens Bread Machines Sales price $ 100 $ 140 Variable costs $ 60 $ 60 Healthier Living can manufacture six toaster ovens per machine hour and four bread machines per machine hour. Healthier Living's production capacity is 1 comma 600 machine hours per month. What is the contribution margin per machine hour for bread machines?

Question

Business

Nehemiah

9 January, 09:15

Healthier Living Company manufactures two productslong dashtoaster ovens and bread machines. The following data are available: Toaster Ovens Bread Machines Sales price $ 100 $ 140 Variable costs $ 60 $ 60 Healthier Living can manufacture six toaster ovens per machine hour and four bread machines per machine hour. Healthier Living's production capacity is 1 comma 600 machine hours per month. What is the contribution margin per machine hour for bread machines?

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Answers (1)

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Spicy · Answer 1

Contribution margin per machine hour for bread machines = $320

Explanation:

From the question, the following can be deduced:

Selling price Variable costs Contribution/unit

Toaster Ovens $100 $60 $40

Bread machines $140 $60 $80

In each machine hour, six toaster ovens per machine hour and four bread machines are manufactured

Total contribution margin per machine hour = 6*40+4*80 = $560

Of which contribution margin per machine hour for bread machines = 4*80=$320