Exercise 10-8 Utilization of a Constrained Resource [LO10-5, LO10-6] Barlow Company manufactures three products: A, B, and C. The selling price, variable costs, and contribution margin for one unit of each product follow: Product Selling price $200 $250 $220 Variable expenses: Direct materials 32 80 40 125 Other variable expenses 108 70 Total variable expenses 165 140 150 60 $100 55 Contribution margin 30% 40% Contribution margin ratio 25% The same raw material is used in all three products. Barlow Company has only 5,300 pounds of raw material on hand and will not be able to obtain any more of it for several weeks due to a strike in its suppliers plant. Management is trying to decide which product(s) to concentrate on next week in filling its backlog of orders. The material costs $8 per pound. Required 1. Compute the amount of contribution margin that will be obtained per pound of material used in each product. Contribution margin per unit Direct material cost per unit Direct material cost per pound Pounds of material required per unit Contribution margin per pound