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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 Selling
Barlow Company manufactures three products: A, B, and C. The selling price, variable costs, and contribution margin for one unit of each product follow Selling price S240 S360 S320 Variable expenses: Direct materials Other varable expenses 21 63 28 147 168 72 153 216 $144 212 240 S 80 Total variable expenses Contribution margin marg in ratio 30% 40% 25% The same raw material is used in all three products. Barlow Company has only 6,000 pounds of raw material on hand and will not be able to obtain any more of it 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 flling its backlog of orders. The material costs $7 per pound. 1. Compute the amount of contribution margin that will be obtained per pound of material used in each Contribution margin per unit Direct material cost per unit Direct material cost per pound Pounds of material required per unit Contribution margin per pound
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