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Barlow Company manufactures three products: A, B and C. The selling price, varlable costs and contribution margin for one unit of each product follow: The
Barlow Company manufactures three products: A, B and C. The selling price, varlable costs and contribution margin for one unit of each product follow: The same raw materlal is used in all three products and costs $4 per kilogram. Barlow Company has only 8,000 kilograms of materlal on hand and will not be able to obtain any more materlal for several weeks due to a strike in its supplier's plant Management is trying to decide which product(s) to concentrate on next week In filling its backlog of orders. Direct labour costs $18 per hour. 2. Which orders would you recommend that the company work on next week-the orders for product A, product B or product C ? Product A Product B Product C 3. A foreign supplier could furnish Barlow with additional stocks of the raw materlal 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 willing to pay for an additional kilogram of materlals? (Do not round Intermedlate calculatlons. Round your answer to 2 decimal places.) 4. Assume that direct labour becomes a constraint Instead of direct materials. How will your answer to Requirement (2) above change? Product A Product B Product C
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