Solution 1:
Solution 2:
As demand of each product is unlimited therefore entire material will be used in production of Product A.
Nos of units to be produced for Product A = 6000 / 3= 2000 units
Maximum contribution margin = 2000 * $54 = $108,000
Solution 3:
If maximum demand of product is 500 units then optimal use of material to earn maximum contribution margin
Product A = 500 units *3= 1500 Pounds
Product C = 500*4 = 2000 Pounds
Product B = 250*10 = 2500 Pounds
Maximum contribution margin that company can earn = (500*$54) + (500*$60) + (250*$100)
= $82,000
Solution 4:
Additional pound of material will be utilized to Produce product B.
Therefore the highest price that Barlow company is willing to pay for additional pound of material = Regular price + Contribution margin per pound of product B
= $8 + $10 = $18 per pound
Barlow Company manufactures three products-A, B, and C. The selling price, variable costs, and contribution margin...
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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 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 product(s) to concentrate on next week in filling its...
Barlow Company manufactures three products-A, B, and C. The selling price, variable costs, and contribution margin for one unit of each product follow: Product В $ 270 $ 180 $ 240 32 Selling price Variable expenses: Direct materials Other variable expenses Total variable expenses Contribution margin Contribution margin ratio 180 $ 54 $ 190 $ 60 30% 378 25% The same raw material is used in all three products. Barlow Company has only 6,600 pounds of raw material on hand...
Barlow Company manufactures three products-A, B, and C. The selling price, variable costs, and contribution margin for one unit of each product follow: Product Selling price Variable expenses: $180 $270 240 Direct materials 24 102 126 80 90 170 32 Other variable expenses Total variable expenses Contribution margin 148 100 $ 54 $100 60 30% 37% 25% Contribution margin ratio The same raw material is used in all three products. Barlow Company has only 6,600 pounds of raw material on...
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