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please answer this two questions Use the following information to answer questions 20-21 Barlow Company manufactures three products: A, B, and C. The selling price,
please answer this two questions
Use the following information to answer questions 20-21 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 B C A Selling price Less variable expenses: Direct materials Other variable expenses Total variable expenses Contribution margin $180 $270 $200 72 24 32 128 102 126 $54 90 162 $108 $ 40 160 Contribution margin ratio 20% 30% 40% ww The same raw material is used in all three products. Barlow Company has only 5,000 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 supplier's plant. Management is trying to decide which product(s) to concentrate on next week in fillings its backlog of orders. The material costs $8 per pound. 20, Which orders would you recommend that the company work on first next week? a. Product A. b. Product B. c. Product C. d. We would be indifferent as to which orders to work on first. 21. A foreign supplier could furnish Barlow with additional stocks of the raw material at a substantial premium over the usual price. If the material was used in the production of Product B, what is the highest price that Barlow would be willing to pay per pound? a. $8. b. $12. c. $18. d. $20 e. $26 Step by Step Solution
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