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Benoit Company produces three products-A, B, and C. Data concerning the three products follow (per unit): A Product B C $ $ Selling price 90.00
Benoit Company produces three products-A, B, and C. Data concerning the three products follow (per unit): A Product B C $ $ Selling price 90.00 66.00 80.00 Variable expenses: Direct materials 27.00 18.00 9.00 Other variable 27.00 31.50 47.00 expenses Total variable expenses 54.00 49.50 56.00 Contribution margin 36.00 $ 16.50 $ 24.00 Contribution margin ratio 40% 25% 30% The company estimates that it can sell 700 units of each product per month. The same raw material is used in each product. The material costs $3 per pound with a maximum of 5,700 pounds available each month. Required: 1. Calculate the contribution margin per pound of the constraining resource for each product. 2. Which orders would you advise the company to accept first, those for A, B, or C? Which orders second? Third? 3. What is the maximum contribution margin that the company can earn per month if it makes optimal use of its 5,700 pounds of materials? Complete this question by entering your answers in the tabs below. Required Required Required 2 Calculate the contribution margin per pound of the constraining resource for each product. (Round your answers to 2 decimal places.) Contribution margin per pound of the constraining Product Product Product B C resource Required 1 Required 2 > Benoit Company produces three products-A, B, and C. Data concerning the three products follow (per unit): Product B Selling price Variable expenses: Direct materials A C $ $ 90.00 66.00 80.00 27.00 18.00 9.00 Other variable nce 27.00 31.50 47.00 expenses Total variable expenses 54.00 49.50 56.00 $ $ $ Contribution margin 36.00 16.50 24.00 Contribution margin 40% 25% 30% ratio The company estimates that it can sell 700 units of each product per month. The same raw material is used in each product. The material costs $3 per pound with a maximum of 5,700 pounds available each month. Required: 1. Calculate the contribution margin per pound of the constraining resource for each product. 2. Which orders would you advise the company to accept first, those for A, B, or C? Which orders second? Third? 3. What is the maximum contribution margin that the company can earn per month if it makes optimal use of its 5,700 pounds of materials? Complete this question by entering your answers in the tabs below. Required Required Required 1 2 3 What is the maximum contribution margin that the company can earn per month if it makes optimal use of its 5,700 pounds of materials? (Round your intermediate calculations to 2 decimal places.) Maximum contribution margin < Required 2 Required 3 > Show less
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