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

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: Product Selling price $200$250 $220 Variable expenses Direct materials Other variable 32 80 40 108 70 125 expenses Total variable expenses 140 150 165 Contribution margin $ 60$100 55 Contribution margin ratio 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 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 $8 per pound Required 1. Compute the amount of contribution margin that will be obtained per pound of material used in each product. Contribution margin per unit Direct material cost per unit Direct material cost per pound Pounds of material required per unit Contribution margin per pound 2a.Compute the amount of contribution margin on each product. Contribution margin per ound Pounds of material available otal contribution margin

Explanation / Answer

A B C 1) 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 5,300 5,300 5,300 total contribution margin 79500 53000 58300 2b) product A 3) Maximum amount 23 per pound

Related Questions

Navigate

• Browse (All)
• Browse B
• Subjects

---

---

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