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Yogurt Palace Produces Two Flavors of Low-Fat Frozen Yogurt: Blueberry

Question 142

Multiple Choice

Yogurt Palace produces two flavors of low-fat frozen yogurt: Blueberry and Raspberry.Information regarding the products is summarized for the month of January in the following table:  Blueberny  Raspbery  Number of units 6,0002,000 Sales revenue $90,000$20,000 Fixed costs 20,0009,000 Variable costs 36,0005,000 Profit $34,000$6,000 Amount of processing time per unit 1.4 hours 1.1 hours  Contribution margin per unit $9.00$7.50 Profit per unit $5.67$3.00\begin{array}{lrr}&\text { Blueberny }&\text { Raspbery }\\ \text { Number of units } & 6,000 & 2,000 \\\hline \text { Sales revenue } & \$ 90,000 & \$ 20,000 \\\text { Fixed costs } & 20,000 & 9,000 \\\text { Variable costs } & 36,000 & 5,000\\\text { Profit } & \$ 34,000 & \$ 6,000 \\\text { Amount of processing time per unit } & 1.4 \text { hours } & 1.1 \text { hours } \\\text { Contribution margin per unit } & \$ 9.00 & \$ 7.50 \\\text { Profit per unit } & \$ 5.67 & \$ 3.00\end{array} Yogurt Palace determined it will have only 9,040 hours of processing time during February for which it can produce yogurt, and it must produce a minimum number of each flavor to remain competitive.Of which flavor should Yogurt Palace produce the most units and why?


A) Raspberry.It will contribute a larger amount towards profit for each unit of resource available.
B) Blueberry.It will contribute a larger amount towards profit for each unit of resource available.
C) Blueberry.It generates a higher contribution margin per unit.
D) Raspberry.Fewer units will need to be produced using fewer hours, allowing excess hours for other products.

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