Barlow Company manufactures three products: A, B, and C. The selling price, vari

Question

Barlow Company manufactures three products: A, B, and C. The selling price, variable costs, and contribution margin for one unit of each product follow:

$180       

$250       

$254       

84       

   88       

134       

$72       

$84       

$96       

The same raw material is used in all three products. Barlow Company has only 6,000 pounds of raw material on hand and will not be able to obtain any more of it for several weeks due to a strike in its supplier's plant. Management is trying to decide which product(s) to concentrate on next week in filling its backlog of orders. The material costs $4 per pound.

Compute the amount of contribution margin that will be obtained per pound of material used in each product. (Round your answers to 2 decimal places. Omit the "$" sign in your response.)

Barlow Company manufactures three products: A, B, and C. The selling price, variable costs, and contribution margin for one unit of each product follow:

Explanation / Answer

Hi,

Please find the answer as follows:

Thanks.

A B C Direct Material Cost 24 78 24 Cost per pound 4 4 4 Direct material pounds per unit 6 19.5 6 Contribution margin 72 84 96 Contribution margin per pound 12 4.31 16

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