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Chip Company produces three products, Kin, Ike, and Bix. Each product uses the same direct material. Kin uses 4.9 pounds of the material , lke
Chip Company produces three products, Kin, Ike, and Bix. Each product uses the same direct material. Kin uses 4.9 pounds of the material , lke uses 2.6 pounds of the material, and Bix uses 5.9 pounds of the material. Selling price per unit and variable costs per of each product follow kin Ike Bix Selling price per unit $ 180.34 $ 101.58 $ 214.08 Variable costs per unit 99.00 80.00 148.00 (a) Compute contribution margin per pound of material for each product. (b) If demand is limited, list the three products in the order i which management should produce and meet demand. Answer is complete but not entirely correct. Product Contribution Margin kin Ike $ 180.34 $ 101 58 $ 4.90 2.00 $ 36,81 $ 39.06 s BLX Sales Variable costs Contribution margin per pound 214.08 5.30 36.28 Order in which management should produce and meet demand: Second First Third (a) Compute contribution margin per pound of material for each product. (b) If demand is limited, list the three products in the orde which management should produce and meet demand. Answer is complete but not entirely correct. Product Contribution Margin Bix Sales Variable costs Contribution margin per pound $ Kin 180.34 4.90 36.81 Ike 101.58 260 214.08 5.90 36.28 $ $ 39.06 $ Order in which management should produce and meet demand: Second First Third
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