Chip Company produces three products, Kin, Ike, and Bix. Each product uses the same direct material. Kin uses 4.9 pounds of the material, Ike uses 2.9 pounds of the material, and Bix uses 5.5 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 $ 173.48 99.00 Total production hours available Variable costs Contribution margin per pound Ike $ 99.36 75.00 (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 Bix $ 205.85 147.00 Order in which management should produce and meet demand: $ Kin 173.48 $ 99.00 74.48 $ First Ike Third 99.36 $ 75.00 24.36 $ Bix 205.85 147.00 58.85 Second
Chip Company produces three products, Kin, Ike, and Bix. Each product uses the same direct material. Kin uses 4.9 pounds of the material, Ike uses 2.9 pounds of the material, and Bix uses 5.5 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 $ 173.48 99.00 Total production hours available Variable costs Contribution margin per pound Ike $ 99.36 75.00 (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 Bix $ 205.85 147.00 Order in which management should produce and meet demand: $ Kin 173.48 $ 99.00 74.48 $ First Ike Third 99.36 $ 75.00 24.36 $ Bix 205.85 147.00 58.85 Second
Chapter3: Cost-volume-profit Analysis
Section: Chapter Questions
Problem 7PA: Manatoah Manufacturing produces 3 models of window air conditioners: model 101, model 201, and model...
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