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Product A Product B Product C Selling price $ 70 $ 75 $ 85 Variable costs per unit: Direct materials Direct labor 16 24
Product A Product B Product C Selling price $ 70 $ 75 $ 85 Variable costs per unit: Direct materials Direct labor 16 24 20 40 28 32 Variable overhead 2 2 3 Total variable cost per unit 58 54 55 $ 12 $ 21 $ 30 Contribution margin per unit The company incurs total fixed costs of $50,000. The maximum demand for each of its products is 600 units. Its direct material cost is $8.00 per pound. The company has only 3,000 pounds of direct materials available for production. Assuming the company has made optimal use of its 3,000 pounds of direct material, what is the maximum amount per pound the company should be willing to pay for additional direct materials? Multiple Choice $14.00 $20.00 $15.00 $16.00
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