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can anyone slove it with detailed clarification Amman Manufacturing Company is producing three products all of which require the same production facilities. Financial data on
can anyone slove it with detailed clarification
Amman Manufacturing Company is producing three products all of which require the same production facilities. Financial data on the three products are as follows: Costs per unit Product (1) Product (2) Product (3) Direct Labor Cost JOD 26 JOD 42 JOD 46 Direct Materials Cost JOD 18 JOD 24 JOD 30 Traceable Manufacturing Overhead JOD 16 JOD 24 JOD 32 All three products use the same raw material in production but with different quantities. The cost of this raw material is JOD 24 per a kilogram. The raw materials used in production is scarce "a constrained resource", such that all three products that can be produced falls below the quantities that the market would need. The Chief Financial Officer (CEO) decided to evaluate the contribution margin for each product based upon the scarce raw materials needed per each product of the three products. The CEO asked you as a Manager to recommend to him the price at which the company would need to sell products (2) and (3). The selling prices for the two products should achieve the same contribution margin to produce and sell a unit of the three products. Knowing that the prices of products (2) and (3) are not market driven. Moreover, product (1) is sold in a market where the selling price per unit is market driven then fixed at JOD 120 per unit Step by Step Solution
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