Core Co. is a company that builds and sells personal computers. In the past, the company was simply a parts supplier for other computer companies. Recently, however, they have been attempting to break into the market with their own personal brand as well. But to ensure a steady revenue stream, Core Co. is still producing a particular part to sell to other companies.
After expanding their production operations, Core Co. has seen great success in sales. They are currently producing at 90% capacity (of total floor space occupied), and are unsure whether to devote that extra capacity to producing more of their own computers or to simply increase the number of parts they supply to other companies. The following is information regarding the two options:
The Core Co. factory has a total of 10,000 square feet of floor space. Which option would return the highest contribution margin per month, and how much would it be?

Question

Core Co. is a company that builds and sells personal computers. In the past, the company was simply a parts supplier for other computer companies. Recently, however, they have been attempting to break into the market with their own personal brand as well. But to ensure a steady revenue stream, Core Co. is still producing a particular part to sell to other companies. 
After expanding their production operations, Core Co. has seen great success in sales. They are currently producing at 90% capacity (of total floor space occupied), and are unsure whether to devote that extra capacity to producing more of their own computers or to simply increase the number of parts they supply to other companies. The following is information regarding the two options:
  The Core Co. factory has a total of 10,000 square feet of floor space. Which option would return the highest contribution margin per month, and how much would it be?

Quizplus · Accepted Answer

The Answer of Core Co. is a company that builds and sells personal computers. In the past, the company was simply a parts supplier for other computer companies. Recently, however, they have been attempting to break into the market with their own personal brand as well. But to ensure a steady revenue stream, Core Co. is still producing a particular part to sell to other companies. 
After expanding their production operations, Core Co. has seen great success in sales. They are currently producing at 90% capacity (of total floor space occupied), and are unsure whether to devote that extra capacity to producing more of their own computers or to simply increase the number of parts they supply to other companies. The following is information regarding the two options:
  The Core Co. factory has a total of 10,000 square feet of floor space. Which option would return the highest contribution margin per month, and how much would it be?

Core Co Is a Company That Builds and Sells Personal Computers