Barlow Company manufactures three products: A, B, and C. The selling price, variable costs, and contribution margin for one unit of each product follow:

The same raw material is used in all three products. Barlow Company has only 4,800 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 suppliers plant. Management is trying to decide which product(s) to concentrate on next week in filling its backlog of orders. The material costs $8 per pound

1.	Compute the amount of contribution margin that will be obtained per pound of material used in each product. b. Compute the amount of contribution margin on each 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 willing to pay for an additional pound of materials?

Selling price Variable expenses: Direct materials Other variable expenses Total variable expenses Contribution margin Contribution margin ratio $210 16 152 168 42 20% Product $320 64 160 224 96 30% $300 24 231 255 45 15%