Selling price Variable expenses: Direct materials Other variable expenses Total variable expenses Contribution margin. Contribution margin ratio A $75.00 22.50 22.50 45.00 $30.00 40% Product B $64.00 15.00 33.00 48.00 $ 16.00 25% C $66.00 12.00 34. 20 46. 20 $ 19.80 30% he company estimates that it can sell 900 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 5,400 pounds available each month. equired: Calculate the contribution margin per pound of the constraining resource for each product. . Which orders would you advise the company to accept first, those for A, B, or C? Which orders second? Third? . What is the maximum contribution margin that the company can earn per month if it makes optimal use of its 5,400 pounds of materials?
Selling price Variable expenses: Direct materials Other variable expenses Total variable expenses Contribution margin. Contribution margin ratio A $75.00 22.50 22.50 45.00 $30.00 40% Product B $64.00 15.00 33.00 48.00 $ 16.00 25% C $66.00 12.00 34. 20 46. 20 $ 19.80 30% he company estimates that it can sell 900 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 5,400 pounds available each month. equired: Calculate the contribution margin per pound of the constraining resource for each product. . Which orders would you advise the company to accept first, those for A, B, or C? Which orders second? Third? . What is the maximum contribution margin that the company can earn per month if it makes optimal use of its 5,400 pounds of materials?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Expert Solution
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 5 steps with 9 images
Recommended textbooks for you
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education