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Bariow Company manufactures three products: A, B, and C. The selling price, varlable costs, and contribution margin for one unit of each product follow: Product
Bariow Company manufactures three products: A, B, and C. The selling price, varlable costs, and contribution margin for one unit of each product follow: Product S10 S240 Seling price Variable expenses 177 Other variable expenses. 144 ses - 20% 30% 15% Contnbuton mergin ratio The same raw material is used in all three products. Barlow Company has only 5,400 pounds which productis) to concentrate on next week in filling its backlog of orders. The material costs $9 per pound. hand and will not be able to obtain any more of it for several weeks due to a strike in its aupplier's plant Management is trying to decide material Required: Compute the amount of contribution margin that will be obtained per pound of material used in each product. C Contribulion margin per unit Direct material cost per unit Pounda of ato runit Contribution margin per pound 2a. Compute the amount contribution margin on each praduct. Contribution margin per pound Pounds of material available Tolal oontribution margin 2b. Which orders would you recommend that he company work on nexd week-the orders product A, product B, or product C Product A Producl B Product C A foreign supplier could furnish Barlow with additional stocks of the raw material at a substantial premium over the usual price. If there is unfilled demand for all three products, what is the highest price that Barlow Company should be willingg to pay for additional pound of materials? per pound Maximum amount
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