Homework Answers
Answer to Question:
| Particulars | A | B | C |
| Selling price per unit | $180 | $300 | $240 |
| Less: Variable Expenses | ($126) | ($180) | ($180) |
| Contribution per unit | $54 | $120 | $60 |
| Raw Material per unit(WN) | 3 | 10 | 4 |
| Contribution per pound | $18 | $12 | $15 |
As the Company as exhausted all its raw material optimally on its jobs, the highest price that the Company will be willing to pay for each additional pound of raw material will be Maximum Contribution earned per pound of raw material from existing raw material i.e $18.
Answer: $18
Working Note:
Statement of Rae Material required per unit:
| Particulars | A | B | C |
| a)Direct Material Cost per unit | $24 | $80 | $32 |
| b)Cost per Pound | $8 | $8 | $8 |
| c) No of Pounds Of Raw Material required per unit of Product(a/b) | 3 | 10 | 4 |
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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: 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...
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