Selling price per unit Variable costs per unit Kin $ 167.50 91.00 Contribution margin per pound Ike $ 124.40 90.00 (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. Bix $ 206.90 146.00 Product Contribution Margin Order in which management should produce and meet demand: Kin Ike Bix

Financial And Managerial Accounting
15th Edition
ISBN:9781337902663
Author:WARREN, Carl S.
Publisher:WARREN, Carl S.
Chapter21: Variable Costing For Management analysis
Section: Chapter Questions
Problem 5BE: Contribution margin by segment The following information is for LaPlanche Industries Inc.: Determine...
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Po.23.

Chip Company produces three products, Kin, Ike, and Bix. Each product uses the same direct material. Kin uses 4.5 pounds of the material, Ike uses 4 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
$ 167.50
91.00
Contribution margin per pound
Ike
$ 124.40
90.00
(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.
Bix
$ 206.90
146.00
Product Contribution Margin
Order in which management should produce and meet demand:
Kin
Ike
Bix
Transcribed Image Text:Selling price per unit Variable costs per unit Kin $ 167.50 91.00 Contribution margin per pound Ike $ 124.40 90.00 (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. Bix $ 206.90 146.00 Product Contribution Margin Order in which management should produce and meet demand: Kin Ike Bix
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