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Barlow Company manufactures three products-A, B, and C. The selling pnice, 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 pnice, variable costs, and contribution margin for one unit of each product follow The same faw materal is used in all three products. Batlow Company has only 6.000 pounds of raw matelial 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 producted to concentrate on next week in filling its backlog of orders. The material costs 58 per pound Required: 1. Calculate the contribution margin per pound of the constraining resource for coch product 2. Assuming that Barlow has unlimited demand for each of its three products, what is the maxinum contribution margin the company can eam when using the 6,000 pounds of raw material on hand? 3. Assuming that Barlow's estimated customer demand is 500 units per product line what is the maximum contribution margin the company can earn when using the 6,000 pounds of raw material on hand?. 4. A foreign supplier could furnish Barlow with aditional stocks of the raw mateiaf at a substantial premium over the usuar price. Assuaning Barlow's estimated customer demand is 500 unds per prodict line and that the company hats used its 6.000 pounds of raw matertal in an optimal fashion, What is the highest price Barlow Campany should be wiling to pay for an additional pound of materials
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