Home Bakery Company manufactures two products-toaster ovens and bread machines.The following data are available: $$\begin{array} { | l | r | r | }
\hline & \text { Toaster Ovens } & \text { Bread Machines } \
\hline \text { Sales price } & \$ 100 & \$ 160 \
\hline \text { Variable costs } & \$ 20 & \$ 70 \
\hline
\end{array}$$ Home Bakery Living can manufacture six toaster ovens per machine hour and four bread machines per machine hour.Home Bakery's production capacity is 1,600 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: $$\begin{array} { | l | r | r | } 
\hline & \text { Toaster Ovens } & \text { Bread Machines } \
\hline \text { Sales price } & \$ 100 & \$ 160 \
\hline \text { Variable costs } & \$ 20 & \$ 70 \
\hline
\end{array}$$ Home Bakery Living can manufacture six toaster ovens per machine hour and four bread machines per machine hour.Home Bakery's production capacity is 1,600 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

The contribution margin per unit for toaster ovens is calculated as sales price minus variable costs, which is $100 - $20 = $80. Since Home Bakery can manufacture six toaster ovens per machine hour, the contribution margin per machine hour for toaster ovens is $80 * 6 = $480.

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