The Benoit Company produces three products A, B and C. The per unit data is as follows: ProductABC$80 $56 $70 241509242740484249 Selling Price………………………………Less: Variable ExpensesDirect Materials………………………….. Other variable expenses………………… Total variable expenses………………….Contribution Margin per Unit……………$32$14$21Contribution margin Ratio……………….40%25%30% Demand for the company’s products is very strong, with far more orders each month than the company has raw materials available to produce. The same material is being used in each product. The material costs $3 per pound with a maximum of 5000 pounds available each month. The demand of product A, B and C is 800,700 and 600 respectively. Required: Compute the contribution margin per pound of direct material, which orders would you advise the company to accept first for those of product, A, B or C which combination of products A,B & C will generate the maximum contribution margin. Question No.3The Benoit Company produces three products A, B and C. The per unit data is as follows:ProductABCSelling Price.Less: Variable Expenses$80$56$70Direct Materials..241509Other variable expenses...Total variable expenses..242740484249Contribution Margin per Unit..Contribution margin Ratio..$3240%$1425%$2130%Demand for the company's products is very strong, with far more orders each month than the companyhas raw materials available to produce. The same material is being used in each product. The materialcosts $3 per pound with a maximum of 5000 pounds available each month. The demand of product A, Band C is 800,700 and 600 respectively.Required:Compute the contribution margin per pound of direct material, which orders would you advise thecompany to accept first for those of product, A, B or C which combination of products A,B & C willgenerate the maximum contribution margin.

Selling price per unit: It is the price at which a product is sold in the market. The selling price…

Answered: The Benoit Company produces three…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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The Benoit Company produces three products A, B and C. The per unit data is as follows:

Product

A	B	C
$80	$56	$70
24	15	09
24	27	40
48	42	49

Selling Price………………………………

Less: Variable Expenses

Direct Materials………………………….. Other variable expenses………………… Total variable expenses………………….

Contribution Margin per Unit……………	$32	$14	$21
Contribution margin Ratio……………….	40%	25%	30%

Demand for the company’s products is very strong, with far more orders each month than the company has raw materials available to produce. The same material is being used in each product. The material costs $3 per pound with a maximum of 5000 pounds available each month. The demand of product A, B and C is 800,700 and 600 respectively.

Required:

Compute the contribution margin per pound of direct material, which orders would you advise the company to accept first for those of product, A, B or C which combination of products A,B & C will generate the maximum contribution margin.

Question No.3
The Benoit Company produces three products A, B and C. The per unit data is as follows:
Product
A
B
C
Selling Price.
Less: Variable Expenses
$80
$56
$70
Direct Materials..
24
15
09
Other variable expenses...
Total variable expenses..
24
27
40
48
42
49
Contribution Margin per Unit..
Contribution margin Ratio..
$32
40%
$14
25%
$21
30%
Demand for the company's products is very strong, with far more orders each month than the company
has raw materials available to produce. The same material is being used in each product. The material
costs $3 per pound with a maximum of 5000 pounds available each month. The demand of product A, B
and C is 800,700 and 600 respectively.
Required:
Compute the contribution margin per pound of direct material, which orders would you advise the
company to accept first for those of product, A, B or C which combination of products A,B & C will
generate the maximum contribution margin.

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