IM Enterprises sells two products, Crunchies and Munchies.Crunchies have a 32 percent contribution margin and Munchies have a 35 percent contribution margin.Profit earned from each box of Crunchies is $8 and the profit earned from each box of Munchies is $7.If the company is planning to generate revenue of $100, what should the company do?

Question

Quizplus · Accepted Answer

To maximize profit, the company should focus on selling the product with the highest contribution margin, which is Munchies. Although Crunchies have a higher profit per unit, Munchies have a higher contribution margin percentage, indicating that a larger portion of each sale goes towards covering fixed costs and generating profit. Therefore, the company should sell more Munchies to generate the most revenue and profit.

IM Enterprises Sells Two Products, Crunchies and Munchies