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Benoit Company produces three products-A, B, and C. Data concerning the three products follow (per unit): The company estimates that it can sell 900 units
Benoit Company produces three products-A, B, and C. Data concerning the three products follow (per unit): The company estimates that it can sell 900 units of each product per month. The same raw material is used in ea product. The material costs $4 per pound with a maximum of 5,400 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 , pounds of materials? Complete this question by entering your answers in the tabs below. Calculate the contribution margin per pound of the constraining resource for each product. (Round your answers to 2 decimal places.) What is the maximum contribution margin that the company can earn per month if it makes optimal use of its 5,400 pounds of materials? (Round your intermediate calculations to 2 decimal places.) You have just been hired by FAB Corporation, the manufacturer of a revolutionary new garage door opening device. The president has asked that you review the company's costing system and "do what you can to help us get better control of our manufacturing overhead costs." You find that the company has never used a flexible budget, and you suggest that preparing such a budget would be an excellent first step in overhead planning and control. After much effort and analysis, you determined the following cost formulas and gathered the following actual cost data for March: During March, the company worked 17,000 machine-hours and produced 11,000 units. The company had originally planned to work 19,000 machine-hours during March. Required: 1. Prepare a flexible budget for March. 2. Prepare a report showing the spending variances for March. Complete this question by entering your answers in the tabs below. Prepare a flexible budget for March. (Input all amounts as positive values.) Prepare a report showing the spending variances for March. (Indicate the effect of each variance by selecting "F" for favorable, "U" for unfavorable, and "None" for no effect (i.e., zero variance). Input all amounts as positive values.)
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