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Prepare the calculation and provide suggestions as required: Xerox Company manufactures three products: Shoes, Handbags and Belts. The selling price, variable costs and fixed costs
Prepare the calculation and provide suggestions as required: Xerox Company manufactures three products: Shoes, Handbags and Belts. The selling price, variable costs and fixed costs for one unit of each product are below: Selling price Direct materials Other variable costs Fixed costs Shoes $180 24 102 44 Handbags $270 72 90 98 Belts $240 32 148 49 The same raw material (vegan leather) is used in all three products. Xerox Company has only 4,000 kilograms of raw material on hand. Management is trying to decide which product(s) to concentrate on next week in filling its backlog of orders. Direct materials cost $8 per kilogram. a) Compute the amount of contribution margin per unit of the constraint. (12 marks) Response template: Windows b) Based on the answer you calculated in question (a), which product(s) should the company produce first? List in order. (3 marks) $ ELE Her c) What possible steps could Xerox Company take that lead to a higher level of contribution margin? (5 marks) i. B IU X2 x EE ABC NEW
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