Product $ 160 $ 270 $ 240 Selling price Variable expensest Direct materials Other variable expenses Total variable expenses Contribution margin 16 100 se 90 170 $ 100 32 148 180 S60 124 $36 23% 37% Contribution margin ratio 255 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 supplier's plant Management is trying to decide which products) to concentrate on next week in filling its backlog of orders. The material costs $8 per pound Required: 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 6,000 pounds of raw material on hand? 3. Assuming that Barlows estimated customer demand is 500 units per product line, what is the maximum contribution margin the company can earn when using the 6.000 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 once Assuming Barlow's estimated customer demand is 500 units per product line and that the company has used its 6,000 pounds of raw material in an optimal fashion, what is the highest price Barlow Company should be witng to pay for an additional pound of materials? Complete this question by entering your answers in the tabs below. Required: Required 2 Required) Required Calculate the contribution margin per pound of the constraining resource for each product. A Contributor margin per pound of the cornet resource Required 1 Required 2 Required 3 Required 4 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 6,000 pounds of raw material on hand? Mum contribution margin 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 6,000 pounds of raw material on hand? Madmum contribution margin Required 1 Required 2 Required 3 Required 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 and that the company has used its 6,000 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? Show less Highest price willing to pay per pound
