Block city car lot is a car dealership and the owner is trying to decide how muc
ID: 2595711 • Letter: B
Question
Block city car lot is a car dealership and the owner is trying to decide how much front row space along the highway to devote to each of the four car models. There is a max of 200 feet to devote to the car models. He wants a minimum of 20 feet and a max of 8- feet for the front row space.
Converible Truck sedan SUV
sales price 40,000 30,000 60,000 25,000
variable cost per unit 32,000 23,000 45,000 16,000
units solds per 10 feet of front row space per month 10 18 6 25
The converible model monthly contribution per 10 feet of front row is
a 70,000
b 60,000
c 90,000
d 80,000
e 30,000
Explanation / Answer
Contribution margin per Converible model = 40000 - 32000 = 8000.
The converible model monthly contribution per 10 feet of front row is:
8000 * 10 = 80,000
Answer - d 80,000