Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

I only need help with Part 3.. Please show work! Benoit Company produces three productsA, B, and C. Data concerning the three products follow (per

I only need help with Part 3.. Please show work!

Benoit Company produces three productsA, B, and C. Data concerning the three products follow (per unit):

Product

A B C
Selling price $ 80 $ 56 $ 70
Variable expenses:
Direct materials 24 15 9
Other variable expenses 24 27 40
Total variable expenses 48 42 49
Contribution margin $ 32 $ 14 $ 21
Contribution margin ratio 40 % 25 % 30 %

The company estimates that it can sell 800 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 5,000 pounds available each month.

Required:

1. Calculate the contribution margin per pound of the constraining resource for each product.

Solved>>>>>Contribution margin per pound (A) 4.00 (B) 2.80 (C) 7.00

2. Which orders would you advise the company to accept first, those for A, B, or C? Which orders second? Third?

Solved>>>>>>>>>First (C) Second (A) Third (B)

3. What is the maximum contribution margin that the company can earn per month if it makes optimal use of its 5,000 pounds of materials?

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Dcaa Audits Widespread Problems With Audit Quality Require Significant Reform: Gao 09 1009t

Authors: U. S. Government Accountability Office

1st Edition

1287232027, 978-1287232025

More Books

Students also viewed these Accounting questions

Question

Prepare a constructive performance appraisal.

Answered: 1 week ago

Question

List the advantages of correct report formatting.

Answered: 1 week ago