Managerial Accounting

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Doug Maximize Profit, Limited Oven Hours


"Dog-Loving" Doug makes three types of dog treats as a part-time job on the weekends. He is not ready to quit his Monday-Friday job (yet) to make treats full time. Until then, he can only bake treats on the weekend/holidays and so the oven hours are limited to what he can bake at home (no access to a commercial kitchen). He estimates he can use the oven about 80 hours a month.

Beef Bones Chicken Bones Sweet Potato Bones
Sales price per bag \$5.00 \$4.00 \$3.00
Variable costs \$3.00 \$2.00 \$1.50
oven hours per bag 0.40 hours 0.20 hours 0.25 hours
market demand, bags 60 150 200

For the production schedule that maximizes profits, which products should be made?

Highlight ALL that would be in the optimal production plan.

Highlight Answer(s) Below

beef bones chicken bones sweet potato bones