1. Contribution margin per pound of constraining resource | ||||||
Pro A | Pro B | Pro C | ||||
Direct Material Cost | 16 | 80 | 32 | |||
Cost 8/pound | ||||||
Material Required/Product | 2 | 10 | 4 | |||
Contribution | 36 | 100 | 60 | |||
Contribution/Pound | 18 | 10 | 15 | |||
Rank | 1 | 3 | 2 | |||
2. Assuming unlimited demand and 6000 pounds raw materials | ||||||
Company will produce only Product A as its contribution per material is highest. | ||||||
So, Contribution Margin for Product A | ||||||
Product A production | ||||||
(6,000/2 Pounds) | 3000 | Units | ||||
Contribution | 1,08,000 | |||||
(3000 units * 36) | ||||||
3.if 500 demand for each product | ||||||
Required materials | ||||||
Pounds | Rank | Use of 6000 pounds | units Produced | Contribution/unit | Total Contribution | |
Product A | ||||||
(500*2) | 1000 | 1 | 1000 | 500 | 36 | 18000 |
Product B | ||||||
(500*10) | 5000 | 3 | 2000 | 200 | 100 | 20000 |
Product C | ||||||
(500*4) | 2000 | 2 | 2000 | 500 | 60 | 30000 |
Total | 8000 | 5000 | 68000 | |||
Maximum Contribution Margin = $ 68,000 | ||||||
4. Highest price that company could pay is - | ||||||
Company will sell Product B using this material | ||||||
Sales Price | 270 | |||||
Less: | ||||||
Variable Cost (Excluding Material) | 90 | |||||
180 | ||||||
Contribution Excl. Raw Materials | 180 | |||||
Material Required/Unit | 10 | Units | ||||
Maximum Cost that company could pay | (180/10) | $ 18/pound |
Barlow Company manufactures three products-A, B, and C. The selling price, variable costs, and contribution margin...
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 AB $ 180 $ 270 $ 240 24 Selling price Variable expenses: Direct materials Other variable expenses Total variable expenses Contribution margin Contribution margin ratio 102 126 $ 54 90 170 $ 100 37% 32 148 180 $ 60 25% 30% The same raw material is used in all three products. Barlow Company has only 6,000...
Barlow Company manufactures three products-A, B, and C. The selling price, variable costs, and contribution margin for one unit of each product follow: Α $ 180 Product в $ 300 с $ 240 18 90 27 Selling price Variable expenses: Direct materials Other variable expenses Total variable expenses Contribution margin 126 144 120 210 $ 90 177 204 $36 $ 36 20% 30% 15% Contribution margin ratio The same raw material is used in all three products. Barlow Company has...
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 A В $180 $240 $240 Selling price Variable expenses: Direct materials 18 72 27 Other variable expenses Total variable expenses 126 96 177 144 168 204 36 72 36 Contribution margin Contribution margin ratio 20% 30% 15% The same raw material is used in all three products. Barlow Company has only 5,400 pounds of raw material...
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 AB $180 $240 $240 Selling price Variable expenses: Direct materials Other variable expenses Total variable expenses Contribution margin Contribution margin ratio 18 126 144 $ 36 20% 72 96 168 $ 72 30% 27 177 204 $ 36 15% The same raw material is used in all three products. Barlow Company has only 5,400 pounds of...
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 B $ 240 $ 180 $ 220 Selling price Variable expenses: Direct materials Other variable expenses Total variable expenses Contribution margin Contribution margin ratio 18 126 144 72 96 168 30 140 170 $ 50 $ 36 $ 72 208 30% 238 The same raw material is used in all three products. Barlow Company has only...
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 $ 180 $ 270 $ 240 Selling price Variable expenses: Direct materials Other variable expenses Total variable expenses Contribution margin Contribution margin ratio 24 102 126 $ 54 308 80 90 170 $100 378 32 148 180 $ 60 258 The same raw material is used in all three products. Barlow Company has only 6,600 pounds...
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 $150 $240 S2ee Selling price Variable expenses: Direct materials Other variable expenses Total variable expenses Contribution margin 128 120 $ 30 129 168 Contribution margin ratio 20% The same raw 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...
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...