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A company produces three products. Data concerning the selling prices and unit costs of the two products for a given month are in the table
A company produces three products. Data concerning the selling prices and unit costs of the two products for a given month are in the table below. Assume all products use the same Direct Material. The company was only able to get 3,996 lbs of the direct material for this month. The Direct Material cost $5.00/16 The company must choose which products it will produce and in what order. Use this information to complete the tables and questions below. 8A. Calculate the Contribution Margin (CM and the CM/pound of constrained material in the table below: Products Selling price per unit ($/unit) Direct Material costs per unit (S/ unit) Other Variable costs per unit (S/ unit) Total variable Costs per unit (S/unit) Contribution Margin (S/unit) Contribution Margin ($/per pound of constrained material) A 185 50 10 60 B 130 40 10 50 195 90 15 105 8B. List the order in which the company should produce the products. Explain why? 8C. Assume there is unlimited demand for each product in the market. Which products) would the company produce and what is the total contribution margin (S) the company would make given the constrained material? (Show your work for full credit.) 8D. Assume there is limited demand on each product. Each market demand is equal to 200 units. How much of each product would the company produce? (Show your work for full credit.) 8E. What is the total contribution margin ($) the company would make given the constrained resource and the situation in 8D above? (Show your work for full credit.)
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