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

Question

Benoit Company produces three products-A, B, and C. Data concerning the three products follow (per unit): Product Selling price Variable expenses: $86.00 66.00 $76.00 9.00 25.80 25.80 51.60 Direct materials 18.00 31, 31.50 44.20 53:20 Other variable expenses Total variable expenses Contribution margin Contribution margin ratio 49.50 53: $34.40 16.50 $22.80 40% 25% 30% The company estimates that it can sell 950 units of each product per month. The same raw material is used in each product. The material costs $3 per pound with a maximum of 5,000 pounds available each month. Required 1. Calculate the contribution margin per pound of the constraining resource for each product. 2. Which orders would you advise the company to accept first, those for A, B, or C? Which orders second? Third? 3. What is the maximum contribution margin that the company can earn per month if it makes optimal use of its 5,000 pounds of materials? Complete this question by entering your answers in the tabs below Required 1Required 2 Required 3 Calculate the contribution margin per pound of the constraining resource for each product. (Round your answers to 2 decimal places.) duct BProduct Contribution margin per pound of the constraining resource Required 1 Required 2>

Explanation / Answer

Calculate contribution margin per pound :

2) Order :

so if we want optimal use of 5000 pounds of materials then maximum contribution margin is (5000*7.60) =38000

Product A Product B Product C Contribution margin per unit 34.40 16.50 22.80 Pound per unit 8.60 6.00 3.00 Contribution margin per pound 4 2.75 7.60

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