Healthier Living Company Manufactures Two Products-Toaster Ovens and Bread Machines

question 119

Multiple Choice

Healthier Living Company manufactures two products-toaster ovens and bread machines.The following data are available: $$\begin{array} { | l | r | r | } \hline & \text { Toaster Ovens } & \text { Bread Machines } \\\hline \text { Sales price } & \$ 120 & \$ 160 \\\hline \text { Variable costs } & \$ 60 & \$ 70 \\\hline\end{array}$$ Healthier Living can manufacture six toaster ovens per machine hour and four bread machines per machine hour.Healthier Living's production capacity is 2,000 machine hours per month.What is the contribution margin per machine hour for bread machines?

• A) $60
• B) $90
• C) $360
• D) $540

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Definitions:

Intermediate Products

Goods that are used as inputs in the production of final products, not intended for end consumers.

Further Processing

involves additional operations on a product to enhance its value before selling.

Constrained Resource

A constrained resource refers to a limiting factor in a production or operational process, which restricts the output or throughput of the system.

Current Profitability

A measure of a company's financial performance in the present or most recent accounting period, indicating the net income earned.