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Harlow Company manutactures three products A,B, and C. the selling price, varlable costs, and contribution margin tor one unit or. each product follow: The same
Harlow Company manutactures three products A,B, and C. the selling price, varlable costs, and contribution margin tor one unit or. each product follow: The same raw material is used in all three products. Barlow Company has only 6.000 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 suppler's plant Management is trying to decide which productis) to concentrate on nextweek in filling its backlog. of orders. The material cosis $8 per pound Required: 1. Calculate the contribution margin per pound of the constraining resource for each producti 2. Assuming that Barlow hos unimited demand for each of its three products. What is the maximum contribution margin the compatily can earn when using the 6,000 pounds of raw material on hand? 3. Assuming that Barlow's estimated customer demand is 500 units per product line, what is the maximum contribution matgin the company can earn when using the 6,000 pounds of raw materiat on hand? 4. A roreign supplier could furnish Bariow with addivonal stocks of the raW material at a substantial premlum over the useal price. Assuming Barlow's estimated customer demand is 500 units per product line and that the company has used its 6,000 pounds of raw moterial in an optimal foshion, what is the highest pnce Barrow Company should be willing to pay for or odditional pocind of materials
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