Home Bakery Company manufactures two products-toaster ovens and bread machines.The following data are available: $$\begin{array} { | l | r | r | }
\hline & \text { Toaster Ovens } & \text { Bread Machines } \
\hline \text { Sales price } & \$ 80 & \$ 140 \
\hline \text { Variable costs } & \$ 60 & \$ 60 \
\hline
\end{array}$$ Home Bakery Living can manufacture six toaster ovens per machine hour and four bread machines per machine hour.Home Bakery's production capacity is 2,000 machine hours per month.What is the contribution margin per machine hour for toaster ovens? (Round machine hour per unit to two decimal places and your final answer to the nearest whole dollar. )

Question

Home Bakery Company manufactures two products-toaster ovens and bread machines.The following data are available: $$\begin{array} { | l | r | r | } 
\hline & \text { Toaster Ovens } & \text { Bread Machines } \
\hline \text { Sales price } & \$ 80 & \$ 140 \
\hline \text { Variable costs } & \$ 60 & \$ 60 \
\hline
\end{array}$$ Home Bakery Living can manufacture six toaster ovens per machine hour and four bread machines per machine hour.Home Bakery's production capacity is 2,000 machine hours per month.What is the contribution margin per machine hour for toaster ovens? (Round machine hour per unit to two decimal places and your final answer to the nearest whole dollar. )

Quizplus · Accepted Answer

Contribution margin per machine hour for toaster ovens = (Sales price per unit - Variable cost per unit) x Units produced per machine hour= ($80 - $60) x 6= $20 x 6= $120

Home Bakery Company Manufactures Two Products-Toaster Ovens and Bread Machines