Auden Makes Three Types of Vitamin Supplements, All of Which

Essay

Auden makes three types of vitamin supplements, all of which require the use of encapsulating machines that have a capacity of 10,000 hours. Information on the three types (per case) is as follows: $\begin{array}{lrrr}&\text { Basic }&\text { Vita-Stress } & \text { Antioxidant+ }\\\text { Selling price } & \$ 100 & \$ 125 & \$ 160 \\\text { Variable cost } & 50 & 70 & 90 \\\text { Machine hours } & 0.4 & 0.50 & 0.8\end{array}$ Required:
A. Calculate the contribution margin per case for each type.
B. Calculate the contribution margin per hour of machine time for each type.
C. Based on your analysis in requirement B, if the company can sell all that it can make of all of the products, how many of each type should be sold to maximize total contribution margin?