Syllabus- 2178-1 -34ACc × y D Ch 12 2 Attempt ) Tim Mc Graw-Live Li e > ezto.mhe

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Syllabus- 2178-1 -34ACc × y D Ch 12 2 Attempt ) Tim Mc Graw-Live Li e > ezto.mheducation.com/hm.tpx Question 5 (of 7) value: 5.14 points ompany produces three products, A, B, and C. Data concerning the three products follow (per unit): Product Selling price S 110 S 90 S 100 Variable expenses: Direct materials 33.00 27.00 7.00 Total variable expenses Contribution margin Contribution margin ratio Other variable expenses 33.00 66.00 $44.00 40.50 67.50 $22.50 63.00 70.00 $3000 40% 25% 30% 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 $8 per pound with a maximum of 5,100 pounds available each month

Explanation / Answer

ANSWER =1 PEODUCTS A B C Selling price $110.00 $90.00 $100.00 Less: Variable Expenses Direct Material $33.00 $27.00 $7.00 Other Variable Expenses $33.00 $40.50 $63.00 Total Variable Expenses $66.00 $67.50 $70.00 Contribution Margin (A) $44.00 $22.50 $30.00 Material Used (in Pounds)(B) $4.13 $3.38 $0.88 ($ 33 / $ 8) ($ 27 / $ 8) ($ 7 / $ 8) Contribution per Pounds (A/ B) $10.67 $6.67 $34.29 Ranking of the Products on the basis of Contribution per pound of material 2 nd 3 rd 1 St ANSWER = 2 Product C = First Product A = Second Product B = Third

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