FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Rosehill Co. manufactures two types of toilet paper: Ultra-strong and Ultra-soft. Because of a recent shortage of chlorine-based bleach, a key ingredient needed for the two products, the company has to decide the optimal amount of each product to produce. Information related to the two products that use chlorine-based bleach are shown below:

 

 

Ultra-strong

Ultra-soft

Selling price per case

$100

$96

Variable cost per case

$40

$44

Chlorine-based bleach required per case (in liters)

10

8

Maximum monthly demand (in cases)

500

700

 

 

Assume that Rosehill Co. only has 7,200 liters of Chlorine-based bleach available next month. To maximize the company’s contribution margin next month, how many cases of Ultra-strong and how many cases of Ultra-soft the company should produce?

 

Multiple Choice

a)300 cases of Ultra-strong and 400 cases of Ultra-soft
b)500 cases of Ultra-strong and 275 cases of Ultra-soft
c)500 cases of Ultra-strong and 700 cases of Ultra-soft
d)160 cases of Ultra-strong and 700 cases of Ultra-soft
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