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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STANDARD COSTINGA company produces a product which has a standard variable production cost of $8 per unit made up as follows:$ per unitDirect material $4.60 (2kg X $2.30 per kg)Direct labour $2.10 (0.7 hours X $3.00 per our)Variable overhead $1.30Fixed manufacturing costs are treated as period costs. The following information is availablefor the period just ended.Variable manufacturing cost of sales (at standard cost) $263,520Opening stock of finished goods (at standard cost) $120,800Closing stock of finished goods (at standard cost) $146,080Direct material rice variance $2,571 unfavourableRaw materials used in manufacture (at actual cost) $170,310Direct labour rate variance $4,760 unfavourableDirect labour efficiency variance $3,240 favourableRequired:(a) Determine for the period just ended(i) the number of units produced(ii) the raw material usage variance(iii) the total actual direct labour cost, and(iv) the actual cost per kg of raw material used.
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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:
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Subject-Acounting
Given the following information, determine the product cost of one unit: Direct Materials = $60; Direct labor = $10; Apply Overhead based on $2 per Direct Labor hour; Direct labor hours is 4 hours per unit. a. $70 per unit b. $80 per unit c. $78 per unit d. $85 per unit Contribution margin is sales less: a. Fixed overhead and fixed selling and administrative expenses b. Variable Cost of goods sold and variable selling & administrative expenses c. Variable selling and administrative expemses and Fixed selling and administrative expenses d. variable cost of goods sold An investment generates an operating income of $100,000, and the average operating assets are $400,000. What is the return on the investment? a. 100% b. 75% c. 25% d. 20%
Edgewater Enterprises manufactures two products. Information follows: Product A Product B Sales price $ 12.00 $ 15.25 Variable cost per unit $ 6.20 $ 6.90 Product mix 30% 70% M6-17 [LO 6-6] es Required: Calculate Edgewater's weighted-average contribution margin per unit. Note: Round your intermediate calculations and final answer to 2 decimal places. Weighted average CM per unit
Bruno Company accumulates the following data concerning a mixed cost, using miles as the activity level. Miles Driven Total Cost January 8,015 February 7,510 $14,195 13,515 Miles Driven Total Cost March 8,500 $15,000 April 8,205 14,495 a. Compute the variable cost per mile using the high-low method. b. Compute the fixed cost elements using the high-low method.
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
Required information [The following information applies to the questions displayed below.] Felix & Company reports the following information. Period Units Produced 0 1 2 9 10 408 800 1,200 1,600 2,000 2,400 2,800 3,200 3,600 Total Costs $ 2,545 Total cost at the high point Variable costs at the high point Volume at the high point Variable cost per unit Total variable costs at the high point Total fixed costs 3,265 3,985 4,705 5,425 6,145 6,865 7,585 (1) Use the high-low method to estimate the fixed and variable components of total costs. (2) Estimate total costs if 3,000 units are produced. High-Low method- Calculation of variable cost per unit 8,305 9,025 Total cost at the low point Variable costs at the low point Volume at the low point Variable cost per unit Total variable costs at the low point Total fixed costs (2) Estimated cost if 3,000 units are produced: Estimated total cost High-Low method-Calculation of fixed costs 0
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