Benoit Company produces three products, A, B, and C. Data concerning the three p

Question

Benoit Company produces three products, A, B, and C. Data concerning the three products follow (per unit):

Product

Demand for the company’s products is very strong, with far more orders each month than the company can produce with the available raw materials. The same material is used in each product. The material costs $3 per pound with a maximum of 4,800 pounds available each month.

Compute contribution margin per pound of materials used. (Round your intermediate calculations and final answers to 2 decimal places.)

Which orders would you advise the company to accept first, those for A, for B, or for C? Which orders second? Third?

Benoit Company produces three products, A, B, and C. Data concerning the three products follow (per unit):

Explanation / Answer

a) Compute contribution margin per pound of materials used. (Round your intermediate calculations and final answers to 2 decimal places.)

b) Which orders would you advise the company to accept first, those for A, for B, or for C? Which orders second? Third?

Product A Product B Product C Contribution margin per unit 40 20 27 Pound per unit 10 8 2.1 Contribution margin per pound 4 2.5 12.86

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