Question
Company produces three productsA, B, and C. Data concerning the three products follow (per unit): Product A B C Selling price $80.00 $57.00 $70.00 Variable
Company produces three productsA, B, and C. Data concerning the three products follow (per unit):
Product A B C
Selling price $80.00 $57.00 $70.00
Variable expenses:
Direct materials 24.00 15.00 12.00
Other variable expenses 24.00 27.75 37.00
Total variable expenses 48.00 42.75 49.00
Contribution margin $32.00 $14.25 $21.00
Contribution margin ratio 40% 25% 30%
The company estimates that it can sell 750 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 6,200 pounds available each month.
Contributioin margin per pound of the constraining resource:
A B C
$4.00 $2.85 $5.25
What is the maximum contribution margin that the company can earn per month if it makes optimal use of its 6,200 pounds of materials?(Round your intermediate calculations to 2 decimal places.)
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