Barlow Company manufactures three products: A B, and C. The seling price, variable costs, and contribution margin for one unit of each product follow: Product Seling price $210 $320 $300 Variable expenses: Direct materials Other variable expenses 16 152 64 160 24 231 Total variable expenses 168 224 255 Contribution margin $ 42 $ 96 $ 45 Contribution margin ratio 20% 30% 15% The same raw material is used in all three products. Barlow Company has only 4,800 pounds of raw material on hand and will not be able to obtain any more of it for several weeks due t supplier's plant. Management is trying to decide which product(s) to concentrate on next woek in filing its backlog of orders. The material costs $8 per pound. a strike in i Required: 1. Compute the amount of contribution margin that wil 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
Barlow Company manufactures three products: A B, and C. The seling price, variable costs, and contribution margin for one unit of each product follow: Product Seling price $210 $320 $300 Variable expenses: Direct materials Other variable expenses 16 152 64 160 24 231 Total variable expenses 168 224 255 Contribution margin $ 42 $ 96 $ 45 Contribution margin ratio 20% 30% 15% The same raw material is used in all three products. Barlow Company has only 4,800 pounds of raw material on hand and will not be able to obtain any more of it for several weeks due t supplier's plant. Management is trying to decide which product(s) to concentrate on next woek in filing its backlog of orders. The material costs $8 per pound. a strike in i Required: 1. Compute the amount of contribution margin that wil 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
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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