Benoit Company produces three products-A, B, and C, Data concerning the three products follow (per unit):ProductB$ 66.00Selling priceVariable expenses:Direct materialsOther variable expensesTotal variable expensesContribution marginContribution margin ratioA$ 92.0027.6027.6055.20$36.8040%18.0031.5049.50$16.5025%C$ 82.0012.0045.4057.40$ 24.6030%The company estimates that it can sell 950 units of each product per month. The same raw material is used in each product. Thematerial costs $3 per pound with a maximum of 6,100 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 6,100 pounds ofmaterials?

The contribution margin benefit helps a company make more informed decisions about how to allocate…

Answered: 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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A company's product sells at $12.26 per unit and has a $5.39 per unit variable cost. The company's total fixed costs are $96,700. The contribution margin per unit is:
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Benoit Company produces three products-A, B, and C. Data concerning the three products follow (per unit): Product B $ 62.00 Selling price Variable expenses: Direct materials Other variable expenses Total variable expenses Contribution margin Contribution margin ratio A $ 80.00 24.00 24.00 48.00 $ 32.00 Required 1 Required 2 40% Required 3 18.00 25.40 43.40 $18.60 30% с $81.00 The company estimates that it can sell 800 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. 9.00 43.65 52.65 $28.35 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? 35% Complete this question by…
Mazoon Company has information on its revenue and costs is as follows: Selling price per unit $175; Variable costs per unit includes: Direct material $60, Direct manufacturing labor $8, Manufacturing overhead $8, and Selling costs $10; Annual fixed costs $45,000. What is the contribution margin percentage? O a. 56.6% O b. 61.1% O c. None of the given answers d. 50.9% Ое. 49.1%
Chip Company produces three products, Kin, Ike, and Bix. Each product uses the same direct material. Kin uses 3.4 pounds of the material, Ike uses 2.3 pounds of the material, and Bix uses 5.8 pounds of the material. Selling price per unit and variable costs per unit of each product follow. Selling price per unit Variable costs per unit Kin $ 157.02 105.00 Ike $ 105.16 84.00 Вix $ 219.18 149.00 (a) Compute contribution margin per pound of material for each product. (b) If demand is limited, list the three products in the order in which management should produce and meet demand. Product Contribution Margin Kin Ike Bix Contribution margin per pound Order in which management should produce and meet demand:
A tile manufacturer has supplied the following data: Boxes of tiles produced and sold Sales revenue Variable manufacturing expense Fixed manufacturing expense Variable selling and administrative expense Fixed selling and administrative expense Net operating income a. b. $ $ What is the company's unit contribution margin? $0.86 per unit $2.35 per unit $4.10 per unit $1.75 per unit C. d. 520,000 2,132,000 650,000 $ 464,000 $ 260,000 $ 312,000 $ 446,000
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Company XYZ has three products A, B and C. The sales mix for products A, B and Care 7, 5 and 4 units respectively. The contribution margin per unit for products A, B and C are $900, $600 and $400 respectively. Assuming that the fixed costs were $2,272,000. What is the breakeven point in units (in total)? (rounded to the nearest number) O a. 800 O b. 1,641 O c. None of the given answers O d. 6,745 O e. 3,335
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Required information [The following information applies to the questions displayed below] Oslo Company prepared the following contribution format income statement based on a sales volume of 1,000 units (the relevant range of production is 500 units to 1,500 units): $ 10,000 5,500 4,500 2,250 Sales Variable expenses Contribution margin Fixed expenses Net operating income 2,250 2. What is the contribution margin ratio? Contribution margin ratio
The following variable production costs apply to goods made by Zachary Manufacturing Corporation: Cost per unit $ 9.00 Item Materials Labor Variable overhead 2.50 0.75 Total $12.25 Required Determine the total variable production cost, assuming that Zachary makes 6.000, 16,000, or 26,000 units. Units Produced 6,000 16,000 26,000 Total variable cost
Company XYZ produced and sold 6,000 units. The selling price per unit was OMR10. The variable manufacturing cost per unit was OMR5. The variable selling and administrative expenses per unit was OMR4. The total fixed expenses were OMR2,000. Calculate the total contribution margin. of tion Select one: O a. OMR60,000 b. OMR6,000 O c. OMR58,000 O d. OMR4,000 e. OMRB0,00O Beginning raw materials inventory was OMR85,000. During the month, OMR175,000 of raw materials was purchased. A count at the end of the month revealed that OMR54,000 of RM was still present. The cost of indirect materials used during the month was OMR15,000. What of is the cost of direct materials used? tion Select one: O a. OMR119,000 18

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