Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Shelby Company produces three products: product X, product Y, and product Z. Data concerning the three products follow (per unit): Product X Product Y $
Shelby Company produces three products: product X, product Y, and product Z. Data concerning the three products follow (per unit): Product X Product Y $ 90 $ 70 Product Z $ 80 Selling price Variable expenses: Direct materials Labor and overhead 27.00 21.00 5.60 27.00 31.50 50.40 Total variable expenses 54.00 52.50 56.00 Contribution margin $36.00 $ 17.50 $24.00 Contribution margin ratio 40% 25% 30% Demand for the company's products is very strong, with far more orders each month than the company can produce with the available raw materials. The same material is used in each product. The material costs $6 per pound, with a maximum of 4,000 pounds available each month. Required: a. Compute contribution margin per pound of materials used. (Round your intermediate calculations and final answers to 2 decimal places.) Contribution margin per pound $ Product X Product Y Product Z $ $ b. Which orders would you advise the company to accept first, those for product X, for product Y, or for product Z? Which orders second? Third? Product X (Click to select) (Click to select) Product Y Product Z (Click to select)
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started