i Chrome File Edit ie History Bookmarks People Window Help Garrison CH 12 Quiz l

Question

i Chrome File Edit ie History Bookmarks People Window Help Garrison CH 12 Quiz l@ ezto.mheducation.com/hm.tpx D, Sun 2:17 PM a E Barlow Company manufactures three products: A, B, and C. The selling price, variable costs, and contribution margin for one unit of each product follow Selling price $200 S 250 $ 220 Variable expenses: Direct materials 32 40 Other viable expenses Total variable expenses Contribution margin Contribution margin ratio 108 140 $ 60 70 150 S 100 125 165 $ 55 30% 25% The same raw material is used in all three products. Barlow Company has only 5,300 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 suppl er's plant. Management is trying to decide which product(s) to concentrate on next week in filling its backlog of orders. The material costs $8 per pound. Required: 1. Compute the amount of contribution margin that will be obtained per pound of material used in each margin per unit Direct material cost per unit Direct material cost per pound Pounds of material required per unit Contribution margin per pound 5

Explanation / Answer

1 A B C Contribution margin per unit 60 100 55 Direct material cost per unit 32 80 40 Direct material cost per pound 8 8 8 Pounds of material required per unit 4 10 5 Contribution margin per pound 15 10 11 2 A B C Contribution margin per pound 15 10 11 Pounds of material available 5300 5300 5300 Total contribution margin 79500 53000 58300 3 Product A 4 Maximum amount per pound = 8+15 = $23

Related Questions

Navigate

• Browse (All)
• Browse I
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.