question 5

Exercise 13-8 (Algo) Volume Trade-Off Decisions [LO13-5, LO13-6] Barlow Company manufactures three products-A, B, and C. The selling price, variable costs, and contribution margin for one unit of each product follow: The same row material is used in all three products. Barlow Company has only 5,400 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 filing its backlog of orders The moterial costs $9 per pound Required: 1. Caiculate the contribution margin per pound of the constraining resource for each product. 2. Assuming Barlow has unimited demand for each of its three products, what is the maximum contribution margin the company can earn when using the 5,400 pounds of raw material on hand? 3. Assuming Bariows estimated customer demand is 600 units per product line, what is the maximum contribution margin the company can earn when using the 5,400 pounds of raw material on hand? 4. A foreign suppler could furnish Banow with additional stocks of the row material at a substantial premium over the usual price Assuming Barlow's estimated customer demand is 600 units per product line and the company has used its 5,400 pounds of raw materiat in an optimol fashion, what is the highest price Bariow Company should be willing to pay for an adcitional pound of materiais? Complete this question by entering your answers in the tabs below