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

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

Product
A B C
Selling price $ 180 $ 270 $ 240
Variable expenses:
Direct materials 24 80 32
Other variable expenses 102 90 148
Total variable expenses 126 170 180
Contribution margin $ 54 $ 100 $ 60
Contribution margin ratio 30% 37% 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 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.

Required:

2. Assuming Barlow has unlimited demand for each of its three products, what is the maximum contribution margin the company can earn when using the 6,000 pounds of raw material on hand?

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