Benoit Company produces three products, A, B, and C. Data concerning the three products follow...
50.1K
Verified Solution
Link Copied!
Question
Accounting
Benoit Company produces three products, A, B, and C. Data concerning the three products follow (per unit):
Product
A
B
C
Selling price
$
110
$
90
$
100
Variable expenses:
Direct materials
33.00
27.00
7.00
Other variable expenses
33.00
40.50
63.00
Total variable expenses
66.00
67.50
70.00
Contribution margin
$
44.00
$
22.50
$
30.00
Contribution margin ratio
40
%
25
%
30
%
Demand for the companys products is very strong, with far more orders each month than the company can produce with the available raw materials. The same material is used in each product. The material costs $8 per pound with a maximum of 5,700 pounds available each month.
Required:
a.
Compute contribution margin per pound of materials used. (Round your intermediate calculations and final answers to 2 decimal places.)
b.
Which orders would you advise the company to accept first, those for A, for B, or for C? Which orders second? Third?
Answer & Explanation
Solved by verified expert
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
