Eastwood Cake Factory sells chocolate cakes, birthday cakes, and specialty cakes. The factory is experiencing a bottleneck and is trying to determine which cake is most profitable. Even though Eastwood may have to limit its orders, it is concerned about customer service and satisfaction.
a. Compute the contribution margin per hour per cake.
b. Determine which cakes the company should try to sell more of first, second, and then last.

Question

Eastwood Cake Factory sells chocolate cakes, birthday cakes, and specialty cakes. The factory is experiencing a bottleneck and is trying to determine which cake is most profitable. Even though Eastwood may have to limit its orders, it is concerned about customer service and satisfaction.  
a. Compute the contribution margin per hour per cake.
b. Determine which cakes the company should try to sell more of first, second, and then last.

Quizplus · Accepted Answer

The Answer of Eastwood Cake Factory sells chocolate cakes, birthday cakes, and specialty cakes. The factory is experiencing a bottleneck and is trying to determine which cake is most profitable. Even though Eastwood may have to limit its orders, it is concerned about customer service and satisfaction.  
a. Compute the contribution margin per hour per cake.
b. Determine which cakes the company should try to sell more of first, second, and then last.

Eastwood Cake Factory Sells Chocolate Cakes, Birthday Cakes, and Specialty