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I got numbers 1,2 and 4 right but I can't get #3. Barlow Company manufactures three products-A, B, and C. The selling price, variable costs,

image text in transcribedimage text in transcribedI got numbers 1,2 and 4 right but I can't get #3.

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 A B $ 180 $ 270 $ 240 Selling price Variable expenses: Direct materials Other variable expenses Total variable expenses Contribution margin Contribution margin ratio 24 102 126 $ 54 80 90 170 32 148 180 $ 100 $ 60 30% 378 25% The same raw material is used in all three products. Barlow Company has only 6,600 pounds of raw material on hand and will not be able to obtain any more of it for the next month due to a strike in its supplier's plant. Management is trying to decide which product(s) to produce using the existing stock of raw materials. The material costs $8 per pound. Required: (For hints or help on this problem, see the "Ch. 11 Homework - hints/helps" page in the Chapter 11 module in Canvas.) 1. Calculate the contribution margin per pound of the constraining resource for each product. 2. Assuming that Barlow has unlimited demand for each of its three products, what is the maximum contribution margin the company can earn when using the 6,600 pounds of raw material on hand? 3. Assuming that Barlow's estimated customer demand is 500 units per product line per month, what is the maximum contribution margin the company can earn when using the 6,600 pounds of raw material on hand? 4. A foreign supplier could furnish Barlow with additional stocks of the raw material at a substantial premium over the usual price. Assuming Barlow's estimated customer demand is 500 units per product line per month, and assuming Barlow will use its 6,600 pounds of raw material in an optimal fashion, what is the highest price Barlow Company should be willing to pay for an additional pound of materials? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Assuming that Barlow's estimated customer demand is 500 units per product line, what is the maximum contribution margin the company can earn when using the 6,600 pounds of raw material on hand? Maximum contribution margin $ 57,600

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