Question

Muy Bueno Bakery Company sells three different products. Currently they are not able to meet all of their customers' demand. Using the following information, determine the most profitable product. Cake Pie Cookies Contribution margin $18 $11 $3 Production hours 3 1 .30 a.Cake b.Cookies c.Pie d.Cookies and Pie are the same

Answer 1

c. Pie

Step-by-step explanation:

In order to determine which product is the most profitable, we must calculate the contribution margin per hour:

Cake Pie Cookies

contribution margin $18 $11 $3

production time 3 1 .30

contribution margin p/hour $6 $11 $10

Pie is the most profitable product, followed by cookies, and cakes are the less profitable products.