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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: The same
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 and costs $4 per kilogram. Barlow Company has only 12,500 kilograms of material on hand and will not be able to obtain any more material 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 $27 per hour. Required: 1. Compute the amount of contribution margin that will be obtained per kilogram of material used in each product. (Do not round intermediate calculations. Round your answers to 2 decimal places.) 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
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