Question

Zoom Corporation manufactures and sells three different types of binoculars. They are referred to as Good, Better, and Best binoculars. Grinding and polishing time is limited. More time is required to grind and polish the lenses used in the Better and Best binoculars. Additional information is provided below.

Product
Good Better Best
Selling price $76.60 $312.00 $834.00
Variable costs and expenses 52.00 182.00 484.00
Contribution margin $24.60 $130.00 $350.00
Grinding and polishing time required 0.3 hrs 1.3 hrs 5 hrs

Ignoring the time constraint, what strategy would appear to be optimal?

Answer 1

Answer:

Best products

Explanation:

While ignoring the time constraint, the strategy that should be appear to be optimal i.e. to see which product contains high contribution margin

According to the data given in the question the best product would have the highest contribution margin as compared to other two products

So it should be move towards best products