Supreme Celery Corporation manufactures four celery based products. Floods and f
ID: 2347884 • Letter: S
Question
Supreme Celery Corporation manufactures four celery based products. Floods and fire on the west coast are going to cause a shortage of celery for Supreme next month. Information related to the four celery products that it produces are shown below. The numbers relate to the cost per case and the amount of celery per case of product:Jelly Cracker Spread Soup Snack Bars
Sales Price 40 32 35 65
VC 34 22 27 50
Pounds of celery required
18 20 28 38
To maximize profit next month, in what order would it be best for Supreme to schedule production (first to last)?
A. Jelly, Snack Bars, Cracker Spread, Soup
B. Cracker Spread, Snack Bars, Jelly, Soup
C. Snack Bars, Jelly, Soup, Cracker Spread
D. Jelly, Cracker Spread, Soup, Snack Bars
Explanation / Answer
To approach this kind of question, we calculate the contribution generated per each pound for each product using the following formula: CM per pound = (Sale Price - VC) / Pounds required Here's the calculation Jelly = (40-34) / 18 = 0.33 Cracker Spread = (32-22) / 20 = 0.5 Soup = (35-27) / 28 = 0.2857 Snack Bar = (65-50) / 38 = 0.3947 Thus, we should produce in this order: 1) Cracker Spread 2) Snack Bar 3) Jelly 4) Soup The answer is (B)
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