Question

Childress Company produces three products, K1, S5, and G9. Each product uses the same type of direct material. K1 uses 4 pounds of the material, S5 uses 3 pounds of the material, and G9 uses 6 pounds of the material. Demand for all products is strong, but only 50,000 pounds of material are available. Information about the selling price per unit and variable cost per unit of each product follows. K1 G91 S5 Selling price Variable costs $160 $112 $210 96 85 144 1. Calculate the contribution margin per pound for each of the three products. Contribution margin per pound Product K1 Product S5 Product G9 Contribution margin per pound Order in which products should be produced and filled:

Answer 1

Selling Price Less : Varaible Cost Contribution Margin per Unit Prodcut K1 Prodcut S5 Prodcut G9 160.00 112.00 210.00 96.00 85.00 144.00 64.00 27.00 66.00 Answer Prodcut K1 Prodcut S5Prodcut G9 64.00 27.00 66.00 4.00 3.00 6.00 16.00 9.00 11.00 Contribution Margin per Unit Pound per unit Contribution Margin per Pound Oreder in which prodcuts should be produced and filed First Third Second