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Barlow Company manufactures three products: A, B and C The selling price. variable costs and contribution margin for one unit of each product follow Product
Barlow Company manufactures three products: A, B and C The selling price. variable costs and contribution margin for one unit of each product follow Product $158.00 $225.00 $220.00 Selling price Lesst Variable expenses Direct materials Direct labour Other variable expenses Total variable expenses Contribution martin 30.00 125.00 16.0 16.80 29.0 35.00 120.60 376.80 $31.405 48.20 93.00 16.80 70.00 179.80 $40.24 The same raw materials used in all three products and costs $4 per kilogram Barlow company has only 3.000 Krograms of materie on hand and will not be able to obtain any more material for several weeks due to a strike in its supplier plant Management is trying to decide which products) to concentrate on next week in filing its backlog of orders. Direct labour costs Bernou Required: 1. Compute the amount of contribution margin that will be obtained per kilogram of material used in each product Do not Yound Intermediate calculation. Round your answers to 2 decimal placer) B Contribution margin per kilogram 2. Which orders would you recommend that the company work on next week--the orders for product A product B or product C? O Product A O Product B O Product 3. A foreign supplier could furnish Barlow with additional stocks of the raw material at a substantial premium over the usual price 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 materiale? (Do not round Intermediate calculations. Round your answer to 2 decimal places Highest price per kilogram 4. Assume that direct labour becomes a constraint instead of direct materials, How will your answer to Requirement 2 bave changer Product Product B Product
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