1. Childress Company produces three products, K1, S5, and G9. Each product uses the same type of direct material. K1 uses 3.1 pounds of the material, S5 uses 3.4 pounds of the material, and G9 uses 6.3 pounds of the material. Demand for all products is strong, but only 56,000 pounds of material are available. Information about the selling price per unit and variable cost per unit of each product follows.

K1

S5

G9

Selling price

$150.29

$116.98

$210.63

Variable costs

101.00

84.00

147.00

Calculate the contribution margin per pound for each of the three products. (Round your answers to 2 decimal places.)

Contribution margin per pound
	Product K1	Product S5	Product G9
Contribution margin per pound
Order in which products should be produced and filled:

2. I only need to know how much the income will be lowered by. The bottom right cell below.

Marinette Company makes several products, including canoes. The company has been experiencing losses from its canoe segment and is considering dropping that product line. The following information is available regarding its canoe segment.

MARINETTE COMPANY Income StatementCanoe Segment
Sales		$1,950,000
Variable costs
Direct materials	$460,000
Direct labor	560,000
Variable overhead	260,000
Variable selling and administrative	220,000
Total variable costs		1,500,000
Contribution margin		450,000
Fixed costs
Direct	400,000
Indirect	300,000
Total fixed costs		700,000
Net income		$(250,000)

If canoes are discontinued, calculate the net income lost or gained.

	Keep the department	Eliminate the department
Sales	$1,950,000
Expenses:
Direct materials	460,000
Direct labor	560,000
Variable overhead	260,000
Variable selling and administrative costs	220,000
Direct fixed costs	400,000
Indirect fixed costs		300,000
Total expenses	1,900,000	300,000
Net income (loss)	$50,000	$(300,000)
The canoe division should be:	Kept
If the canoe division is eliminated, income will be:	lower by: